A FORMER JP Morgan trader who has turned to cryptocurrencies says “banks have sat on their laurels for 30 years and now they’re paying the price” and has dubbed bitcoin a “true financial revolution”.
Mr Masters said: “Banks have sat on their laurels for 30 years. I just threw out my chequebook, it looks exactly the same as it did in 1985.
“Why should I still have it when I’m doing Uber instead of cabs, Airbnb instead of the Sheraton? They have absolutely failed to innovate in any way, shape, or form and now they’re paying the price.”
Irregardless of a shaky start to this year of the price of bitcoin he still sees 2017 as a huge victory for cryptocurrencies and said “you needed to be a true believer and you needed to suck it up for 2014, ‘15, and ‘16 – and then ‘17 was just off the charts good.”
Mr Masters said: “There’s something of a trench warfare going on between what I call analogue financial services companies and digital financial services companies.”
The ex-trader has a strong financial background as he started as an oil trader at Shell in the 1980s before rising to become head of JPMorgan’s energy trading business in New York.
He left to set up his own commodities fund, Global Advisors.
Global Advisors manages clients funds as a regulated investment manager. After studying bitcoin for some time, the firm’s principals were struck by the parallels with commodities as those developed into investable asset markets from the mid-1990s onwards.
Mr Masters explains his company’s bitcoin orientation by saying: “We’ve gone from a renegade character to a more confusing animal for people to view.
“The analogue financial services companies are not in this game at all. They don’t want to touch the core currency, which is bitcoin or ethereum, they’re suspicious about the industry itself. A lot of people think it’s a criminal enterprise and a Ponzi scheme and a scam.”
Mr Masters feels bankers are only opposed to bitcoin as the cryptocurrency is a threat to traditional banking.
“Banks have gone from dismissive, to unified in their resistance. Why? Why is something they ridiculed three months ago now something they feel the need to unite against and try and kill? There’s been a lot of aggressive things from banks.”
As usual there are plenty of advocates for bitcoin and plenty against it. As of late financial professional seem to like the blockchain technology behind bitcoin but not the cryptocurrency itself.
One of these critics is Mario Draghi, president of the European Central Bank (ECB).
But Mr Masters said: “In my mind, the cryptocurrency landscape is like the fog of war. You might be able to see the few people around you, you can see the hill over there, but very few people can see the whole landscape.
“We’re in a very fortunate position because we touch so many different parts of it. For us, it is abundantly clear that we are in the midst of a true financial revolution.”