Danny Masters ran JPMorgan's New York energy trading business in the 1990s before setting up his own commodities fund.His firm pivoted to bitcoin in 2014 and he has been embracing crypto over since.Masters believes executives from traditional financial firms are trying to fight off crypto by dismissing it as a Ponzi scheme or a scam.Crypto is "a true financial revolution", Masters says, and banks are "paying the price" for failing to innovate for decades.LONDONA former high-flying trader who has embraced the world of cryptocurrencies says there is a "trench warfare" going on between traditional financial services and digital upstarts.Danny Masters told Business Insider: "Theres something of a trench warfare going on between what I call analogue financial services companies and digital financial services companies.Masters began his career as an oil trader at Shell in the 1980s, rising to become head of JPMorgan's energy trading business in New York. He left in the late 1990s to set up his own commodities fund, Global Advisors.Masters became interested in bitcoin and cryptocurrencies around five years ago and pivoted Global Advisors to focus on crypto in 2014. Shortly after, Global Advisors' bank HSBC ditched the business over fears that bitcoin could involve money laundering risks."Weve gone from a renegade character to a more confusing animal for people to view," Masters told BI during an interview in London this week."The analogue financial services companies are not in this game at all. They dont want to touch the core currency, which is bitcoin or ethereum, theyre suspicious about the industry itself. A lot of people think its a criminal enterprise and a Ponzi scheme and a scam."ECB executive board member Yves Mersch compared cryptocurrencies to a Ponzi scheme last week and the president of the World Bank and the head of the Bank for International Settlements have both called bitcoin a scam.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. Were 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."'It is no longer acceptable to dismiss it'Masters thinks that bankers are dismissive of cryptocurrencies because of the threat they pose to traditional banking. The crypto community is built on the principles of decentralization, displacing middlemen, and doing away with legacy systems."At the other end of the spectrum, we saw Charlie Munger only yesterday call bitcoin asinine. We heard Jamie Dimon call bitcoin a fraud. There are some very, very high profilebut usually, deeply legacy entrenchedpeople who are just out-right dismissive.""[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' Theres been a lot of aggressive things from banks."Global Advisors owns a 75% interest in Coinshares, another crypto investment business, and Coinshares announced two new funds in January that have a combined $1 billion in assets under management. Masters argues that stats like this increasingly validate his position and pose problems for traditionalists."The clock has lapsed, it is no longer acceptable to dismiss it. One of the biggest dismissers was Jamie Dimon. JPMorgan recently issued one of the largest reports on cryptocurrency yet seen."Bitcoin rocketed over 1,500% against the dollar last year, leading to a surge in interest from professional investors. Exchange operators Cboe and CME both launched bitcoin futures contracts to tap into the demand, while Goldman Sachs is said to be considering setting up a bitcoin trading desks."If youre going to argue for it, fine, if youre going to argue against it, you better have some good reasons to do so," Masters said. "People are struggling to come up with reasons to argue against it. Theyre saying, its a load of crap and its worth nothing. Its obviously not worth nothing."'Banks have sat on their laurels for 30 years'Masters believes that the crypto world has now reached "escape velocity" and the "analogue" rivals won't be able to catch up or compete. In Masters telling, the new crypto reality will replace our current system."The problem with the analogue financial world is its become hamstrung and mired in a billion regulations," he said. "Nobody enjoys working in it anymore, theres just a tremendous amount of friction. I dont think you can unpick that ball of knots, you have to start over again."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 Im doing Uber instead of cabs, Airbnb instead of the Sheraton' They have absolutely failed to innovate in any way, shape, or form and now theyre paying the price."Despite a rocky start to the year, Masters thinks that the run-up in value for bitcoin and cryptocurrency seen last year is a hard-fought victory for all those who have been involved since the beginning."I got to know the crypto-anarchists many years ago and I was one of the very few financial people involved in the early days. It was a little scary actually. I felt a little self-conscious in some circles," Masters said."Im thrilled for everybody in the space that has stuck to it for the last five years. 2014, after Mt. Gox, was a really miserable year. A lot of people fell off the boat at that time. Guys like Mike Hearn rage quit bitcoin when it was $400. Stripe has now given up bitcoin. There have been people who have lost the nerve along the way."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."Join the conversation about this storyNOW WATCH: Forget 'Make America Great Again' ' Wharton professor says Trump has been terrible for America's brand
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