Morgan Creek Capital CEO on Jamie Dimon’s Attack on Crypto: “When Your Livelihood Depends on Not Understanding Something, You Won’t”

Mark Yusko, the CEO and CIO of Morgan Creek Capital Management, recently appeared on CNBC to share his thoughts on crypto.

Yusko attributed a portion of Bitcoin’s recent price increase to the anticipation of an Exchange-Traded Fund (ETF) approval, expected in early January 2024. He predicted this approval might occur around January 8, coinciding with what he referred to as the “King’s Birthday.” However, Yusko emphasized that the majority of Bitcoin’s growth this year is not solely due to ETF speculation. He pointed out that the market was significantly undervalued a year ago, following the FTX scandal, with Bitcoin’s fair value estimated at around $32,000-$33,000. This value has since increased to the low $50,000s, with the market gradually adjusting to this fair valuation.

Looking ahead, Yusko highlighted the upcoming Bitcoin halving in April 2024, which he believes will create additional demand pressure for Bitcoin. He anticipates this event, along with the onset of “crypto fall” in June 2024, to further energize the market.

The Bitcoin halving, an event programmed to occur roughly every four years or after every 210,000 blocks are mined, is a significant moment in the cryptocurrency’s lifecycle. This event halves the reward miners receive for verifying and adding new transactions to the blockchain. Initially, miners were rewarded with 50 bitcoins per block, but this amount has been halved several times, currently standing at 6.25 bitcoins. With the upcoming halving, the reward will further decrease to 3.125 bitcoins per block. This decrease in mining rewards effectively slows down the rate of new Bitcoin creation, introducing an element of scarcity that could potentially increase demand. This halving process is an integral part of Bitcoin’s design, aimed at controlling inflation and ensuring the total number of bitcoins never exceeds 21 million.

Yusko also discussed the broader crypto market, including Ethereum, Solana, and Avalanche. He described these cryptocurrencies as toolkits for developers to build applications, contrasting them with Bitcoin, which has solidified its status as digital gold. Yusko noted Bitcoin’s growth from zero to a market cap of approximately $850 billion, achieving about 20% of gold’s monetary equivalence.

He introduced the concept of the “Truth Net,” starting in 2024, as part of a long tech cycle that began in 1954. Yusko says this cycle represents a shift from a trust-based system to one where blockchains establish truth. Yusko sees this as a pivotal moment for developing blockchain applications, with significant value accruing at the protocol layer, unlike previous web iterations.

Addressing skepticism from figures like Jamie Dimon, the Chairman of the Board and CEO of global financial services firm JPMorgan Chase & Co., Yusko suggested that those whose livelihoods depend on traditional financial systems may be reluctant to embrace blockchain technology. He compared blockchain’s potential impact on financial services to the internet’s disruption of media and commerce, highlighting the technology’s ability to facilitate direct value exchanges without intermediaries.

As CryptoGlobe reported, at the “Annual Oversight of Wall Street Firms” Senate Banking Committee hearing on 6 December 2023, the JPMorgan CEO voiced his stark opposition to cryptocurrencies. He suggested that the government should contemplate shutting down the cryptocurrency industry. Dimon expressed apprehensions about the capacity of cryptocurrencies to circumvent governmental regulations and their potential attractiveness to nefarious entities. He stated, “My stance has always been strongly against crypto and bitcoin… If it were up to me, I would shut it down.”

In an interview with Michelle Makori, the Lead Anchor and Editor-in-Chief at Kitco News, conducted in August, Yusko shared a highly positive forecast for Bitcoin’s future. He pinpointed two primary factors that he believes could propel Bitcoin’s value by up to 410%. The first is the increasing involvement of institutional investors in the Bitcoin market. Yusko sees this trend as a key driver for heightened demand, drawing a parallel to the internet’s journey from initial skepticism to broad-based adoption.

Yusko’s second factor centers on Bitcoin’s potential role as a global reserve asset. He posits that amidst economic challenges faced by nations, there will be a growing inclination towards decentralized digital assets like Bitcoin, known for their limited supply and decentralized nature. This perspective is consistent with Yusko’s historically optimistic view of Bitcoin. He has previously suggested that Bitcoin might attain a market capitalization comparable to that of gold, which could mean a potential price surge to around $300,000. Yusko highlighted the advantages of Bitcoin over gold, particularly in terms of ease of transfer and portability, and asserted that Bitcoin achieving a market cap similar to gold’s is not just feasible but a logical progression.