Bitcoin Is The Fraud? JPMorgan Metals Desk Fixed Gold Prices For Years (#GotBitcoin?)
Trump Administration Unable And Unwilling To Prosecute Banksters. Bitcoin Is The Fraud? JPMorgan Metals Desk Fixed Gold Prices For Years (#GotBitcoin?)
The United States’ largest bank faced fresh ridicule from Bitcoin (BTC) circles this week after prosecutors said traders had conducted more market fraud.
As Bloomberg reported on Sept. 16, JPMorgan Chase is facing an inquiry over the behavior of at least a dozen precious metals traders.
JPMorgan Performed “Thousands” Of Illegal Moves
According to investigators, the employees willfully engaged in price-fixing of precious metals on thousands of occasions. Both market participants and JPMorgan’s own clients suffered losses as a result, they claim.
“Based on the fact that it was conduct that was widespread on the desk, it was engaged in thousands of episodes over an eight-year period… We’re going to follow the facts wherever they lead, whether it’s across desks here or at any other bank or upwards into the financial institution,” Bloomberg quoted Assistant Attorney General Brian Benczkowski as saying.
JPMorgan is well known as being one of the more vocal skeptics of cryptocurrencies. CEO Jamie Dimon became notorious for his soundbites, which began in 2017 when he labeled Bitcoin a fraud in itself.
Dimon since appeared to have a change of heart, pledging not to discuss Bitcoin again in public, while denying he disliked it in private comments to Cointelegraph.
Bitcoin, Bankers And Fraud
More recently, the bank released its own digital currency offering, JPM Coin, which gained similar criticism over its technical characteristics.
The irony of the precious metals scandal was thus not lost of crypto commentators.
“They were charged with wire fraud, bank fraud, and market manipulation. But I was told by the CEO that Bitcoin is the fraud,” Twitter analyst known as Rhythm summarized.
JPMorgan is not the only bank to issue warnings over cryptocurrency’s alleged fraudulent nature while being embroiled in legal turmoil.
In 2018, Dutch institution Rabobank claimed Bitcoin contained money laundering compliance hazards. Subsequently, authorities fined it $369 million for money laundering.
Bitcoin ‘Can Be’ A Reliable Financial Instrument After All: Mark Cuban
One of the most outspoken critics of Bitcoin (BTC) has delivered mixed messages about its reliability as a financial asset.
In comments to Forbes published on Dec. 10, Mark Cuban appeared to contradict himself on Bitcoin’s overall utility.
When asked whether or not the cryptocurrency could become a “reliable financial instrument,” the Dallas Mavericks owner gave two differing responses. “Not a chance,” he wrote at first. Subsequently, he added, “It is a collectible. If you consider art or gold a viable stable financial asset, then yes. It can be.”
Fiat fails To Comfort Bitcoin Deniers
While Cuban complained that investors were put off Bitcoin due to the difficulty in understanding how it works, the ambiguity of the comments highlighted what has become a common problem for Bitcoin skeptics — explaining why they are skeptical.
In a telling example last year, infamous naysayer Jamie Dimon, CEO of JPMorgan, told a Cointelegraph reporter that he was “not a skeptic” of Bitcoin when pushed to explain his previous claim it was a fraud.
Cuban appeared to set Bitcoin and gold on an unequal footing with fiat currency, something which Bitcoin proponents conversely deny.
As Cointelegraph often notes, figures such as Saifedean Ammous, author of “The Bitcoin Standard,” argue that it is Bitcoin’s limited supply which is among its biggest assets. Fiat, by contrast, faces unlimited manipulation and inflation, destroying value for those who hold or “collect” it.
Cuban has a history of rubbishing Bitcoin, in September suggesting he would prefer bananas over Bitcoin holdings.
JPMorgan’s Pinto Says Client Demand Isn’t There Yet For Them For Bitcoin
JPMorgan Chase & Co. Co-President Daniel Pinto said that client demand isn’t there yet on Bitcoin, but he’s certain that’ll change at some point.
“If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved,” Pinto said in an interview with CNBC. “The demand isn’t there yet, but I’m sure it will be at some point.”
Pinto signaled in a recent staff meeting that he’s open-minded about Bitcoin, CNBC said, citing unidentified people familiar with the matter.
Crypto Is ‘Poorest Hedge’ For Drawdowns In Equities, JPMorgan Analysts Say
Analysts bashed Bitcoin despite JPMorgan co-president Daniel Pinto claiming that Bitcoin adoption is inevitable at some point.
Analysts at American investment bank JPMorgan Chase have delivered another skeptical statement on Bitcoin (BTC), arguing that its current price is much higher than its fair value.
In a regular memo for investors, JPMorgan argued that cryptocurrencies like Bitcoin are an “economic side show” and the poorest hedge against a decline in equity prices, Reuters reports Friday.
The analysts said that the mainstream adoption of Bitcoin increases its correlation with cyclical assets, which makes it a less attractive asset for portfolio diversification:
“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed.”
In January 2021, JPMorgan strategists John Normand and Federico Manicardi argued that Bitcoin has been becoming a cyclical asset, opposed to a hedge against market stress.
A cyclical asset refers to stocks that follow a trend depending on a certain business cycle. For example, companies in discretionary industries like restaurants, hospitality, airlines, furniture, automotive and others.
As previously reported by Cointelegraph, the question of whether Bitcoin is a cyclical or non-cyclical asset is still debatable, with many industry players strongly believing that the cryptocurrency is a great hedge against a market crisis.
The latest comments from JPMorgan come shortly after the company’s co-president Daniel Pinto said that the bank would eventually have to get involved in Bitcoin following growing client demand. In October 2020, when Bitcoin was trading around $13,000, JPMorgan predicted that Bitcoin’s price would double or triple in the long term.
At the time of writing, Bitcoin is trading at $52,764, up more than 70% over the past 30 days. After breaking the $50,000 price level on Feb. 16, Bitcoin briefly hit a new all-time high of above $53,000 earlier today, according to data from crypto monitoring website CoinGecko.
JPMorgan Joins Choir Warning Of Tether’s Sway On Crypto Markets
Questions about the influence of Tether continue to swirl in cryptocurrency markets, even as the companies behind it defend the so-called stablecoin’s soundness.
Tether, whose backers say is equivalent one-to-one to the dollar, is used in transactions to move between cryptocurrencies and fiat money. Traders also often use the token as a place to park funds at times of high volatility, and many consumers in China use it to enter the digital-asset markets.
It has a market capitalization of about $34 billion, according to CoinGecko — but in a sign of how much it’s used in the system, the 24-hour trading volume on Friday was about $107 billion.
Tether “is engaged in a classic liquidity transformation along the lines of traditional commercial banks, but is not subject to the same strict supervisory and disclosure regime, and certainly does not have anything like deposit insurance,” JPMorgan Chase & Co. strategists including Josh Younger and Joyce Chang, wrote in a report released late Thursday.
Tether Ltd. claims to have reserve assets of cash and equivalents equal to its outstanding liabilities, but has “famously not produced an independent audit and has claimed in court filings that they need not maintain full backing,” the strategists said.
“Were any issues to arise that could affect the willingness or ability of both domestic and foreign investors to use Tether, the most likely result would be a severe liquidity shock to the broader cryptocurrency market which could be amplified by its disproportionate impact on high-frequency-trading-style market makers which dominate the flow,” the JPMorgan strategists wrote.
Other industry observers are less concerned, citing the wide use of Tether by large exchanges such as Binance.
“The facts of mass adoption tilt favorably toward Tether’s legitimacy,” said Bloomberg Intelligence strategist Mike McGlone. “It was about April 2019 that Tether came under investigation by the New York Attorney General.
Since then, they have been under their microscope, yet the assets under management has jumped to about $30 billion from around $5 billion. It seems the market doesn’t care.”
New York’s attorney general has alleged that the officials who control the crypto exchange Bitfinex and Tether failed to disclose that it entrusted more than $1 billion of commingled client and corporate funds to a Panamanian firm, Crypto Capital Corp. Bitfinex and Tether have said they’re seeking to recover funds lost when Crypto Capital was shut down.