JPMorgan's Biggest Concern Is That Bitcoin Will Succeed

Tyler Durden's picture


Via JPMorgan CIO Michael Cembalest,

After digesting all the hyperbole and the pessimism, my biggest concern is not that Bitcoin will fail, but that it or one of its many virtual currency competitors will one day succeed.

In the extreme, Bitcoin may lead to economic activity moving from the regulated economy to the underground “shadow” economy (after all, one of its primary selling points lay in its inability to be traced), even if some Bitcoin recipients faithfully declare it as income.

If this were to happen, the tax burden would fall disproportionately on the regulated economy that remains, creating a lot of unwelcome distortions.


Perhaps this is why there is a clear inverse relationship between the size of a country’s shadow economy and its wealth per capita. In other words, no one likes paying taxes, but when no one actually does pay them, everyone suffers.

Libertarianism has its limits.

* * *

Full note from JPM's Cembalest link

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Fri, 03/07/2014 - 22:09 | 4523805 buzzsaw99
buzzsaw99's picture

shadow economies grow because of price fixing skimming fascist maggots like jpm

Fri, 03/07/2014 - 22:14 | 4523825 CH1
CH1's picture

LOL... what a correlation: Taxes make us properous!

Yeah, sure....

Fri, 03/07/2014 - 22:15 | 4523830 buzzsaw99
buzzsaw99's picture

Taxes make THEM prosperous.

Fri, 03/07/2014 - 22:22 | 4523860 CH1
CH1's picture


Fri, 03/07/2014 - 22:31 | 4523879 vie
vie's picture

Income taxes go to pay the interest on the debt owed to the Federal Reserve for using their fiat currency.  Who do you think has a large stake in the privately controlled "Federal" "Reserve"?

Fri, 03/07/2014 - 22:38 | 4523901 tmosley
tmosley's picture

Tyler is really sticking it to the peanut gallery today.  First putting them in the uncomfortable position of being on the side of the Fed, now JPM.

I guess we got someone who is willing to actually consider and evaluate something genuinely new.

Fri, 03/07/2014 - 22:50 | 4523930 fonzannoon
fonzannoon's picture

Yes because "when it becomes serious, you have to tell the truth".

For some reason i thought I heard it differently. 

Fri, 03/07/2014 - 22:54 | 4523940 fonestar
fonestar's picture

Is JPM just figuring this out now?  fonestar still remembers his first time firing up the QT client and transfering Bitcoin around, lightbulbs started flashing and thought, "wow, fonestar has hit paydirt!!".

Fri, 03/07/2014 - 23:03 | 4523970 The Vineyard
The Vineyard's picture

Bitcoin will do nothing.  They flew too close to the sun.  Bastards.

Sat, 03/08/2014 - 00:08 | 4524100 philipat
philipat's picture

It's comforting to know that, after MtGox, Bitcoin can be stollen at will with no trace and no recourse. Yes, I know, by design, transactions are irreversible. That gives me even more comfort. Sounds just like Fiat, but at least that has a serial number?

Sat, 03/08/2014 - 03:36 | 4524431 Scarlett
Scarlett's picture

Please remain uniformed about bitcoin.  Thank you.

Sat, 03/08/2014 - 06:49 | 4524534 TheHound73
TheHound73's picture

Uniformed in a Members Only jacket. Thank you.

Sat, 03/08/2014 - 08:38 | 4524623 tradewithdave
tradewithdave's picture

I resemble that remark... tacitly speaking. 

Sat, 03/08/2014 - 16:52 | 4525538 Stackers
Stackers's picture

Oligarch banker dictionary:
"shadow economy" = " free market "
" regulated economy " = " pyramid wealth transfer scheme "

Sat, 03/08/2014 - 17:25 | 4525652 EscapingProgress
EscapingProgress's picture

This JPM banker is the same asshole who told everyone that ice cream causes polio. Now liberty causes economic ruin? First he tries to ruin ice cream, and now he is trying to ruin liberty. What a miser!

Sat, 03/08/2014 - 20:31 | 4526299 wallstreetapost...
wallstreetaposteriori's picture

Fonestar loves the cock.... how is that mark of the biteast coming?  Dildo straped to the forehead and ready to go?

Sun, 03/09/2014 - 21:31 | 4529144 MeelionDollerBogus
MeelionDollerBogus's picture

His comment is 100% informed so your rebuttal is by definition the actual wave of ignorance.

Fri, 03/07/2014 - 23:57 | 4524123 Jadr
Jadr's picture

Can the Tylers ban this tool's new account already?  Every thread a retarded comment and pimping of a shitty blog.

Sat, 03/08/2014 - 03:37 | 4524432 Bay of Pigs
Bay of Pigs's picture

Of course not, they kill the good posters here instead.

Sat, 03/08/2014 - 11:07 | 4524838 fonestar
fonestar's picture

That's not true.

Sat, 03/08/2014 - 18:44 | 4525883 NidStyles
NidStyles's picture

That you are still posting is evidence enough.

Sat, 03/08/2014 - 05:08 | 4524486 CultiVader
CultiVader's picture

Looked at your blog because the spamming worked. Sucks for me.

Fri, 03/07/2014 - 23:49 | 4524097 wee-weed up
wee-weed up's picture



JPM is not really worried at all...

They know their gov't compadres will see to it...

That bitcoin fails.

Sat, 03/08/2014 - 11:08 | 4524841 fonestar
fonestar's picture

Haha... you seriously think JPM, Fed, BOE... any of them can do anything about Bitcoin?

Sat, 03/08/2014 - 11:32 | 4524893 Greenskeeper_Carl
Greenskeeper_Carl's picture

yes, I do. As ive said before, I wish you bit coiners luck, but ill sit this one out. There are trillions slushing around in the forex markets. if a small % of that was directed towards bitcoin, one or two TBTF firms could completely take over the market, quietly scoop a bunch of them up, then dump them all at once, driving the price down, rinse and repeat. All they have to do is make it look too volatile for people to trust it as a form of currency. And bitcoin is a central authorities wet dream. Any kind of all digital currency that exists when the feds can and do see and record everything that goes on internet, if they care to, that will include bitcoin. Jumping on to something that is all digital, in a time when we learn, almost daily, about a new way we are being tracked and recorded online, and thinking somehow your bitcoins are somehow still secure, is incredibly niave and childish. The idea that you are throwing a wrench into the system with this 'cryptocurrency' business is laughable.

Sat, 03/08/2014 - 12:36 | 4525023 fonestar
fonestar's picture

Nonsense.  There is no way for JPM or anyone else to quietly "scoop up" a critical amount of BTC.  Your arguments just show how little you understand about Bitcoin as a currency or technology.  Bitcoin is an anarchist's wet dream, not an authorities wet dream and JPM knows that.

Sat, 03/08/2014 - 17:37 | 4525678 Bioscale
Bioscale's picture

I dream gold, sorry.

I would not found any real person that would exchange anything real for bitcoin if I drive my car 4 hours in any direction.

Here bitcoin does not exist. What is it good for?

This world speaks cash and gold.

Sat, 03/08/2014 - 18:48 | 4525888 NidStyles
NidStyles's picture

Wait, I thought the transactions were completely anonymous..


So now you are changing your fucking story. It's so easy to run circles around you mental midgets...


Additionally, seeing as how I was the first Anarcho-Capitalist to frequent this site, I would like to say that no in fact a digitally trackable number is not my wet dream for anything other than a con-game that works to track all transactions without the people actually realizing it, because they actually think their computers are secured and untracable. I can asure you quite the opposite is true. Unless you don't think I can back-tace your location and find out whoe exactly you really are Phony.



Wed, 05/07/2014 - 14:00 | 4736746 Jadr
Jadr's picture

That's a BS comment.  I've been registered longer than you have and had been reading for much longer.  You aren't the first anarcho-capitalist to come to this site.  I actually learned about this site from a group of anarcho capitalists on a different forum and they had been on the site for far longer than I have.

Sun, 03/09/2014 - 21:29 | 4529141 MeelionDollerBogus
MeelionDollerBogus's picture

Nonsense on you: you can't pre-emptively block purchasing of bitcoin by JPM agents nor can you stop NSA servers from being bitcoin miners. They win, you lose.

This is their game, you aren't ever going to win it.

Gold & silver - real money - it's everywhere you want to be.

Sat, 03/08/2014 - 12:17 | 4524986 Jonas Parker
Jonas Parker's picture

Bitcoin - shitcoin... me, I'll just keep on stackin'!

Sat, 03/08/2014 - 12:37 | 4525025 fonestar
fonestar's picture

Like many North American males you like to wear your ignorance and stupidity as a badge of honour.  Sorry to be the one that has to tell you it won't get you anywhere in this new world.

Sat, 03/08/2014 - 23:37 | 4526808 Lionhearted
Lionhearted's picture

They cracked MtGox.

Sat, 03/08/2014 - 05:11 | 4524489 nelsonmandella
nelsonmandella's picture


Sat, 03/08/2014 - 05:11 | 4524490 nelsonmandella
nelsonmandella's picture


Sat, 03/08/2014 - 10:26 | 4524744 css1971
css1971's picture

How many days did it take you to download the blockchain?

Sat, 03/08/2014 - 11:09 | 4524845 FinalEvent
FinalEvent's picture

Uhm,... none.

Multibit for linux or windows

Android wallet for samsung.

All do not require download of blockchain.


Sat, 03/08/2014 - 18:51 | 4525906 NidStyles
NidStyles's picture

Except Fonestar was advocating downloading and storing it on an external device, which is who he was talking to. 

Sat, 03/08/2014 - 11:09 | 4524846 fonestar
fonestar's picture

Don't remember but that's only because fonestar wanted the regular QT client.

Sat, 03/08/2014 - 11:46 | 4524911 dontknowcrapabo...
dontknowcrapabouteconomy's picture

Bitcoins bitches!

Sat, 03/08/2014 - 12:40 | 4525029 fonestar
fonestar's picture

Bitcoin, recommended by cryptozoologists everywhere.

Sat, 03/08/2014 - 14:29 | 4525293 dontknowcrapabo...
dontknowcrapabouteconomy's picture

Cryptocurrency is the future.

You may disagree, but get the hell out of my way.

Sat, 03/08/2014 - 18:52 | 4525913 NidStyles
NidStyles's picture

Incorrect, ten minutes from now is the future. Tommorrow is the future. Bitcoin is a scam from a guy that used to work for the government. 

Sat, 03/08/2014 - 22:21 | 4526641 fonestar
fonestar's picture

The entire internet is ex-gov technology dipshit.

Sun, 03/09/2014 - 21:27 | 4529133 MeelionDollerBogus
MeelionDollerBogus's picture

You don't have a way to get out of: the grid's going down and bitcoin won't work without a grid.

Gold does. Silver does. Silver & gold are the future, bitcoin is done like dinner.

Just zero calories!

Fri, 03/07/2014 - 22:55 | 4523942 A L I E N
A L I E N's picture

"... selling points lay in its inability to be traced"

Obviously this guy knows nothing about bitcoin...

Fri, 03/07/2014 - 23:59 | 4524130 itchy166
itchy166's picture

And obviously your knowledge of Bitcoin is limited.  Transactions in Bitcoin cant be taxed, because despite the fact transactions are registered in the blockchain, they can't be linked to a user.  (unless you are really sloppy).... They also can not be linked to a "place"...

Also, there are many easy ways to transfer money using Bitcoin that AREN'T registered on the Blockchain......






Sat, 03/08/2014 - 00:11 | 4524155 DoChenRollingBearing
DoChenRollingBearing's picture

Yes!  A light bulb just went on.  Very good, plus mucho.

Sat, 03/08/2014 - 00:34 | 4524226 tip e. canoe
tip e. canoe's picture

ooooh wow what a fucking evolutionary idea

i can escape the blockchain

which was supposedly created to escape the taxman

who was supposedly imposed to maintain freedom

which was supposedly won to escape the taxman

who was supposedly created so the king would be willing to release me from the block & chains

wow i'm free!

Sat, 03/08/2014 - 01:13 | 4524289 TheHound73
TheHound73's picture

The blockchain was created to protect us from forgeries and double-spends while receiving bitcoins.

It is data external to the blockchain that decreases users' anonymity.  

Do NOT follow this link or you will be banned from the site!