Jamie Dimon Warns of Looming Bond Market Crisis, Downplays Bitcoin

JPMorgan Chase CEO Jamie Dimon has issued a stark warning about the state of U.S. public debt, suggesting the bond market is teetering on the brink of a crisis. In a recent interview with Fox Business, Dimon also shared his views on Bitcoin and the broader cryptocurrency landscape.

Dimon, who has led JPMorgan for 19 years, was once considered a potential candidate for Treasury Secretary. However, that position ultimately went to Scott Bessent.

Despite his continued skepticism towards Bitcoin, Dimon acknowledged that JPMorgan is actively developing cryptocurrency solutions, particularly for settlement purposes.

Dimon Sounds the Alarm on U.S. Debt Crisis

Concerns about U.S. public debt are widespread. Even Federal Reserve Chairman Jerome Powell has publicly stated that the current debt level is unsustainable.

In his Fox Business interview, Dimon echoed these concerns, stating, “[U.S. public debt] is a big problem. One day the bond market is going to have trouble. I don’t know if it will be in six months or six years, but we have to pay attention.”

He highlighted the massive daily trading volume of $30 trillion in bonds and the significant foreign holdings of U.S. assets, totaling $35 trillion, along with an additional $30 trillion in private investments. Dimon expressed worry about a potential capital exodus.

“These rates are not set by central banks. They can influence, adjust, try to make it more comfortable, and they should,” Dimon explained. “But if people decide that the American dollar is no longer the ideal place, you will see spreads widen, credit spreads open up, and that will be a problem. We saw that during COVID, and the Fed intervened quickly. It also happened in 2019, 2020. It will happen again. I can almost guarantee that. I just don’t know exactly when or what the trigger will be.”

Dimon clarified that this situation would not negatively impact JPMorgan’s business, emphasizing the bank’s expertise in navigating such scenarios. However, he expressed concern for small businesses, leveraged loans, and real estate financing.

He also mentioned competitors like Stripe, PayPal, and Revolut, which have been involved with Bitcoin for years, as companies performing well.

“Bullets, Tanks, Missiles, Not Bitcoin”

While Bitcoin is often touted as a hedge against economic crises, Dimon remains unconvinced. He doesn’t believe the U.S. should create a strategic reserve of Bitcoin, advocating instead for investments in weapons and military equipment.

“You said something that caught my attention before: that we should be stocking… what?” the Fox interviewer asked.

“Not bitcoins, but bullets, tanks, missiles.”

“Because national security is critical. The most important thing in commerce is protecting our national security,” Dimon emphasized, highlighting the growing use of drones in warfare and the need for the U.S. to adapt.

He believes that national security is directly linked to economic security.

Cryptocurrencies, Yes; Bitcoin, No

Despite his criticism of Bitcoin, Dimon is keenly interested in the cryptocurrency sector. When asked about stablecoin regulation, he discussed the JPM Coin, a cryptocurrency created by JPMorgan in 2019.

“We have the JPMorgan Coin. I believe that if you mean stablecoin as a way to move data, real-time payments, uniting data and payments, that’s real. We will be at the forefront of that. The JPM Coin today can move money and data, but it is a JPMorgan deposit, so it is used internally. At some point, we will externalize it. My view is that we should be in it.”

Reports indicate that major U.S. banks, including JPMorgan, Bank of America, Citigroup, and Wells Fargo, are collaborating to launch a stablecoin pegged to the U.S. dollar.

Dimon suggested that digital currencies could be a highly efficient method for transferring money.

While figures like David Marcus (formerly of PayPal and Meta) and Jack Dorsey (Twitter founder) believe Bitcoin will fulfill this role, Dimon maintains that Bitcoin has no hope of becoming a currency.

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