Angela Monaghan “Bitcoin is a fraud that will blow up, says JP Morgan boss” https://www.theguardian.com/technology/2017/sep/13/bitcoin-fraud-jp-morgan-cryptocurrency-drug-dealers
Bitcoin is a fraud that will ultimately blow up, according to the JP Morgan boss Jamie Dimon, who said the digital currency was only fit for use by drug dealers, murderers and people living in places such as North Korea.
Speaking at a banking conference in New York, Dimon said he would fire “in a second” anyone at the investment bank found to be trading in bitcoin. “For two reasons: it’s against our rules, and they’re stupid. And both are dangerous.”
He added: “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.
“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars,” he said. “So there may be a market for that, but it’d be a limited market.”
It has more than quadrupled in value since December, hitting about $4,700 last month before falling back. It fell by about 5% after Dimon’s comments on Wednesday to below $4,000.
“It is worse than tulip bulbs,” Dimon said, referring to a famous market bubble from the 1600s*2. He predicted big losses for those investing in bitcoin. “Don’t ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up,” he said. “Honestly, I am just shocked that anyone can’t see it for what it is.”
Dimon’s criticism of the currency coincided with a warning from the UK financial regulator against a speculative frenzy in initial coin offerings (ICOs), where internet start-ups are funded by investors using cryptocurrencies such as bitcoin*3.
In an ICO, an investor pays in bitcoins in return for a “coin” or “token” that is in effect their share in the firm.
The FCA said anyone investing in ICOs should be prepared to lose all their money. “ICOs are very high-risk, speculative investments,” it said. “You should be conscious of the risks involved … and prepared to lose your entire stake.”
*3:See Patrick Collinson “Bitcoin investors could lose all their money, FCA warns” https://www.theguardian.com/business/2017/sep/12/cryptocurrency-investors-bitcoin-could-lose-money-fca-warns