Bitcoin Is a Fraud and will Blow Up, JP Morgan Boss Says

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Bitcoin dropped as soon as Jamie Dimon called its traders “stupid”

But not everybody is on board.

In an astonishing tirade against the flagship digital currency, Dimon said that it was only fit for use by drug dealers, murderers and people living in locations like North Korea. But this model has also spurred on a Wild West attitude with criminals and pump and dump schemes. The CEO of JPMorgan made those comments during a conference.

Bankers and financial experts have voiced concern over the unchecked spread of the so-called cryptocurrency, and JP Morgan Chase chief executive Jamie Dimon has come down heavily on bitcoin at various conferences in York, calling the cryptocurrency "a fraud" and "worse than tulip bulbs". He was speaking at an investor conference in NY on Tuesday. Speaking at the Barclays Financial Services Conference yesterday, he described it as a "fraud", "worse than tulips" and only a better option than US dollars if you're a "drug dealer, a murderer stuff like that". In June, Matt Zames, 46, quit as chief operating officer, arguably Dimon's right-hand person, to pursue running a company. "Two, it's stupid. And both are unsafe", said Dimon. He concluded that both cases were "dangerous" to his bottom line. Faster transaction times and generally increased acceptance of the blockchain technology used to exchange cryptocurrency has seen several high-profile investors including Mark Cuban, John McAfee and even actress Gwyneth Paltrow.

Bitcoin initially slipped after Dimon's remarks. It was down as much as 2.7 per cent before recovering. He also called the rise of the cryptocurrency a "fraud" and likened it to another infamous financial bubble - tulip mania - that gripped the Netherlands in the mid-17th century when bulb prices soared and eventually crashed, leaving investors penniless. That didn't end well.

The price of notoriously volatile Bitcoin slid after JPMorgan Chase (JPM) CEO Jamie Dimon knocked the virtual currency for being, well, volatile.

"The currency isn't going to work", he said, at a banking conference in NY. He has cited the recent clampdown in China as evidence to back up his claims, concluding "governments like to control their money supply".

When asked if he thought that this cryptocurrency would be the best performing asset from now to year end, he undoubtedly said "yes". The central bank in India on Wednesday said it was looking at cryptocurrencies as a possible legal tender.

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