JPMorgan (NYSE:JPM) CEO Jamie Dimon called bitcoin “a fraud” last week but Overstock.com (NASDAQ:OSTK) CEO Patrick Byrne told FOX Business the cryptocurrency is useful.
“Remember that a year-and-a-half ago Jamie Dimon wrote a letter to shareholders saying ‘this is going to come eat our lunch.’ He was scared to death of it. I think what they thought was they could get in front of it and they are realizing they can’t get in front of it,” Byrne told Maria Bartiromo on Mornings with Maria on Monday.
Unlike the US dollar, bitcoin is a form of money created at a fixed rate “governed by mathematic principals,” Byrne pointed out.
“How high can bitcoin go? The real question is how low can the dollar go?... I’d love to debate the metaphysical status of this thing bitcoin that comes out of thin air when a couple of years ago [Federal Reserve Chair] Janet Yellen was creating 85 billion new something every month. I think they called them dollars… At least this bitcoin stuff is governed by the laws of mathematics and how much gets created, no one governs these government mandarins when they whisk new dollars into existence,” he said.
Blockchain, the underlying technology behind bitcoin, will be as disruptive as the “Internet was to publishing,” in his opinion.
“What people are realizing about blockchain is that you can take out about 90% of the back office costs of all kinds of mechanisms and banks and stock markets and such,” he said. “That’s why Overstock has been sort of pioneering the application of blockchain to Wall Street. You can not only take out the cost but you can create a version of Wall Street where no one can cheat.”
After a rally in its valuation, Bitcoin prices tumbled on Dimon’s comments. However, its value rebounded Monday morning and was trading around $4,000 per bitcoin.