Jamie Dimon and JP Morgan Chase launched its own cryptocurrency at the end of February 2019, with Dimon claiming that, one day, JP Morgan Chase cryptocurrency “could be used by the consumer”.

This probably came as a surprise to crypto fans, as Dimon has in the past been an outspoken critic of the currency – and at one point dismissed Bitcoin as “a fraud”.

How times have changed – JP Morgan Chase’s own cryptocurrency is currently being trialled among its corporate clients within the bank – but its website makes it clear that as yet there are no plans to enable individuals to purchase JPMC crypto.

Contrast this to the ethos of cryptocurrency and its original product, Bitcoin – a decentralized, unregulated peer-to-peer payment system intended to be accessible to all, including the unbanked and under-banked.

Now the SEC is pondering as to whether cryptocurrencies might actually be classified as securities, based on the 1946 Howey Test. The framework is delightfully non-committal, in conclusion advising crypto exchanges to contact the SEC for more advice on whether crypto under certain circumstances might actually be a security and therefore subject to regulation as such.

Cleaning up a generation’s financial mess

Not surprisingly, soon after Jamie Dimon and JP Morgan Chase unveiled their own cryptocurrency, grassroots cryptocurrency users who believe in the ethos of crypto took to Twitter – including Cole Garner, who was none too impressed with the elder statesmen of finance, including Dimon.

Dimon...

Roubini...

Buffett...

They have no skin in the game that our generation is forced to play, cleaning up their generation's mess.

They'll be dead & gone by the time a trustless deflationary hard money store of value is adopted as global reserve currency.$BTC

— Cole Garner (@ColeGarnerBTC) 6 March 2019

You will note that Garner – who describes himself as a Market Cyclist, Cryptocurrency Analyst, Biohacker, Forex for 7 Years, Polympic Thumbwrestling Champion – was tweeting on 6 March, just a month after Dimon launched JPMC’s new cryptocurrency for corporate clients to try out in early February this year.

The other two names he mentions – Nouriel Roubini and Warren Buffett – have also been outspoken critics of crypto.

Roubini is a US economist who teaches at New York University's Stern School of Business – who is also the chairman of economic consultancy firm Roubini Macro Associates LLC.

Only very recently, he published an article Why Central Bank Digital Currencies Will Destroy Cryptocurrencies on the website ProSyn.

Why Central Bank Digital Currencies Will Destroy Cryptocurrencies by Nouriel Roubini @ProSyn https://t.co/RQEdIHTfUy

— Nouriel Roubini (@Nouriel) 4 April 2019

It appears that rather than diss crypto as before, the new message among traditional finance is if you can’t beat them, join them. This what Roubini has to say as an opener:

“The world’s central bankers have begun to discuss the idea of central bank digital currencies (CBDCs), and now even the International Monetary Fund and its managing director, Christine Lagarde, are talking openly about the pros and cons of the idea.

“This conversation is past due. Cash is being used less and less, and has nearly disappeared in countries such as Sweden and China. At the same time, digital payment systems – PayPal, Venmo, and others in the West; Alipay and WeChat in China; M-Pesa in Kenya; Paytm in India – offer attractive alternatives to services once provided by traditional commercial banks.

“Most of these fintech innovations are still connected to traditional banks, and none of them rely on cryptocurrencies or blockchain. Likewise, if CBDCs are ever issued, they will have nothing to do with these over-hyped blockchain technologies.”

“Over-hyped blockchain technologies” – this is a man “honoured” to be on the list of Top 10 Crypto Influencers as a critic of crypto and blockchain.

“Kudos to @coindesk”, he adds in a New Year tweet to celebrate his selection to the list.

Am honored to be on the list of Top 10 Crypto Influencers. Kudos to @coindesk for recognizing also myself, a leading critic of crypto and blockchain, as an top influencer in this space. https://t.co/JLKutOPysa

— Nouriel Roubini (@Nouriel) 31 December 2018

From “rat poison” to real investment 

And then we have Warren Buffett, whom Cole Garner also singles out in his tweet of 6 March 2019.

Buffett is the elder statesman of the so solid crew of crypto critics, but in an article published at the end of October 2018 on NewsBTC it appeared even he might be falling under the spell of crypto.

“For years now, Warren Buffett has been talking against cryptocurrencies, and Bitcoin especially, claiming that this technology is nothing more than a bubble and a scam. However, recent reports indicate that he may have had a change of heart.”

Crikey, as the Brits like to say. Watsup Warren?

“Mr Buffett, who continuously rejected cryptocurrency and fintech, seems to have decided to invest as much as $600 million into two large fintech firms.

“Each company is set to receive a $300 million investment from Buffett’s own multinational investment conglomerate — Berkshire Hathaway. While he never admitted to it, many believe that Buffett might be ready to finally join the crypto scene.”

Double crikey – although at the time there were no details available, it was believed that Warren’s wonga involved two investments being led by Todd Combs, one of Berkshire’s two portfolio managers.

“In addition,” continues the article, “It appears that his move has been planned for some time, as Berkshire reportedly bought around $300 million stakes of Paytm, which is the largest mobile-payments service in India.

“While this alone did not cause too much suspicion among the cryptocurrency supporters, Berkshire’s second large investment did.”

The second investment was in an IPO for Brazillian payments processor StoneCo – according to NewsBTC.com, the investment was made “soon after Brazil’s largest brokerage announced that Bitcoin and Ethereum exchanges are soon to be launched in this country”.

However, the editorial also makes it clear Mr Buffett has often claimed tech investments are not his thing, so it seems likely his tech advisers think differently. However, this is a man who is known to have called cryptocurrency “rat poison”.

Such changes of heart are perhaps the best endorsement cryptocurrency could possibly have, so thanks guys.

Cryptocurrency defies all predictions

However, down to the nitty gritty – since Bitcoin and Blockchain appeared in 2008 following the fallout from the banking crisis, there have regularly been claims that it is simply fraudulent, a bubble, a fad, a criminal cover up, a conspiracy, whatever.

The figures speak for themselves, however – and this is perhaps why previous Doubting Thomases are now entering the arena, albeit on their own terms and without giving too much away.

Bitcoin remains the most widely used crypto – so that puts paid to all the criticism of it being doomed to failure over the years; and the crypto community now has a choice of more than 1,600 cryptocurrencies in the marketplace.

The peer-to-peer ethos that launched the phenomenon still exists – and the predictions of widespread financial carnage as a result of hacks and fraud has not materialised on the scale imagined.

Crypto has actually grown up – exchanges now have crypto insurance to cover hot and cold wallet fraud, including insider fraud; and if major insurers like Lloyd’s and its broker Aon are willing to work with crypto companies and develop new products specifically tailored to the marketplace, it offers an added layer of security for consumers and investors. It perhaps should be noted that one of Warren Buffett’s preferred investment strategies is buying up insurance companies – maybe insurance sector endorsement for crypto has reassured him.

Ratings for cryptocurrencies now inform the consumer and investor – and the performance of cryptocurrencies continues to defy those who claimed it was a bubble, a fraud or rat poison.

Weiss on Ripple XRP, EOS and Bitcoin

Recent Weiss Crypto Ratings – which include predictions for future performance in 2019/2020 – show that cryptocurrency is gaining in widespread popularity, rather than being yesterday’s news.

According to Weiss, the three Grade A performers in crypto are Ripple XRP, EOS and Bitcoin – for different reasons, but each serving a vital purpose in the crypto space:

• XRP (Tech/Adoption Grade: A and managed by Ripple) is best positioned to compete with SWIFT – the global network for interbank money transfers.
• EOS (Tech/Adoption Grade: A) is currently the leading cryptocurrency challenging Ethereum to become the backbone of the new Internet.
• Bitcoin (Tech/Adoption Grade: A) – upgraded with the rollout of its Lightning Network, Bitcoin is the best-positioned crypto to become a popular store of value for savers and investors.

Ethereum – best for investing in assets – has a Tech/Adoption Grade:  A- mainly because of scaling problems.

In terms of growth, Weiss ranks EOS as among the Top 4 best performers, with a daily user transaction increase from 7,000 in 2018 to 4.6 million by March 2019. Weiss says that EOS has rapidly become “an important player” in the crypto market, with exceptional growth fourteen times the growth rate of Bitcoin and eight times the comparable growth rate of Ethereum, signalling significant consumer confidence in EOS.

When Risk/Reward are factored in, Ripple XRP, EOS, Bitcoin and Ethereum are graded as:

1	EOS	B-
2	XRP	B-
3	Bitcoin	B-
6	Ethereum	C+

where A is excellent, B is good, and C is fair.

The Future of the Crypto Space

Despite crypto being a high-risk currency, the future remains bright, with more daily user transactions boosting consumer confidence and offering blanket usage to those who do not have access to traditional banking or who are under-banked.

Where hacks have occurred – as in the case of the recent Bithumb hack – it was judged to be an insider felony. In a previous hack, Bithumb recovered 45% of the stolen funds within two weeks, however, suggesting that innovative tech would prevent insider theft and new tracking methods would help recover more funds.

There is also more investment in crypto companies – one of the main concerns about the recent SEC framework was the possibility that if tokens and ICOs were classed as securities, current projects might be affected.

However, investments in crypto tech continue, with mobile-focused crypto payments start-up Celo receiving $15 USD from A16z Crypto – and  $10 USD from Polychain Capital invested in Celo’s Gold Tokens project.

Cryptocurrency and blockchain are now at the stage when, to borrow from Everett M. Rogers' Diffusion of Innovations (1962), the early adopters and early evangelists are now seeing converts among the non-believers who promoted an idea of the crypto space as nothing more than a bubble or a gangster’s paradise.

How the senior statesmen of finance will adapt to crypto remains to be seen – currently it seems as though the zeitgeist is to adapt crypto to their own regulate, centralized systems, rather than embrace the ethos of a currency liberated from government intervention and available to all.

However, the traditional world of finance reacts, the crypto space continues to grow, innovate, and make intelligent decisions to combat the downsides of risk and fraud.

Warren Buffett was no stranger to issuing predictions as to the future of Bitcoin – even gazing into his crystal ball and predicting that the Bitcoin bubble would burst spectacularly in 2017. By the end of 2017, it had reached its best high ever.

It may be harsh of Cole Garner to tweet of Dimon, Roubini and Buffett “They'll be dead & gone by the time a trustless deflationary hard money store of value is adopted as global reserve currency”.

But whereas JP Morgan Chase is currently confining its own cryptocurrency to corporate clients within the bank, pioneering crypto companies like Celo are seeking solutions to help a broader demographic.Celo has piloted an “easy-to-use wallet app” in Argentina and Tanzania, allowing verified users and merchants to send and receive small payments.

In a recent investment statement, Celo said it now has more than 40 contributors to the project internationally – including the World Bank Group and the UN, as well as tech companies Google, Microsoft and Apple, and financial companies such as PayPal and Morgan Stanley, as well as staff at MIT and the universities of Stanford, Harvard and Berkeley.

Celo’s mission is to remove the barriers for large-scale adoption of cryptocurrencies as means-of-payment.

In a little over ten years since its inception, the crypto space is proving that it is the new place to do business – and on its own terms.

Jamie Dimon image licensed via Shutterstock.