JP Morgan CEO Jamie Dimon prepared an annual letter to investors this week, warning of major risks to traditional banking.
In his 2022 letter to JP Morgan investors, Jamie Dimon warned of a confluence of risks to JPM stockholders that create an “unprecedented” threat to company profits.
These include the Russian invasion of Ukraine and soaring inflation across the board after the central banks and legislators created more new fiat money over the last two years amid the coronavirus pandemic than the Fed’s QE program in the aftermath of the 2008 global financial crisis.
Jamie Dimon’s 2022 Note to JPM Investors
In his letter to shareholders, Jamie Dimon reported that with a fairly static view of the war in Ukraine, JP Morgan economists have slashed European GDP projections by more than half for 2022 after Russia’s military rolled across the border.
But there were massive capital inflows during March to Bitcoin (BTC), Ethereum (ETH), and some burgeoning altcoins. Crypto investors piled up coins even as the war in Ukraine ramped up, and the Fed hiked interest rates by 0.25% to contain drastic inflation. UBS is forecasting a USD price inflation print for March that will stagger financial markets— a shocking 8.5% rate of inflation.
The gains these coins made in March during a confluence of factors that Jamie Dimon calls “unprecedented” in their danger to traditional banks like his prove all over again crypto’s durable value as a global macro strategic hedge and the industry’s resilient growth in the face of these global financial threats.
Calling Out Fintech
Jamie Dimon specifically called out fintech’s competition from “neobanks,” “shadow banks,” and “digital upstarts” as a threat to JP Morgan’s profits in his letter.
In a quote that could have been penned by the most zealous Bitcoin maximalist, or anti-central banking cryptopunk, Dimon wrote:
“The growing competition to banks from each other, shadow banks, FinTechs and large technology companies is intensifying and clearly contributing to the diminishing role of banks and public companies in the United States and the global financial system.”
(This might remind some in the crypto community of a recent tweet by Twitter and Block founder Jack Dorsey decrying the role of corporations in centralizing the Internet we use today).
Loathe to credit Bitcoin or cryptocurrency, the JP Morgan CEO did not use the terms crypto or blockchain. But interestingly enough, for the cryptocurrency business, he made a surprisingly candid statement acknowledging that the importance of corporations in the global financial system is now on the wane.
He even said he’s scratching his head over why “so many companies and so much capital are being moved out of” corporate equity.
The admission of a threat from emerging fintech and the wane of corporate growth in this era seems to run completely counter to Jamie Dimon’s inveterate skepticism of cryptocurrency. Those factors together have been one of the major theses of crypto bulls since the Bitcoin whitepaper.