‘BITCOIN A FRAUD AND NOT GOING TO WORK’
JPMorgan CEO says digital currency may blow up, predicts big losses for buyers
BITCOIN “is a fraud” and will blow up, said JPMorgan Chase & Co chief executive Jamie Dimon yesterday. Speaking at a bank investor conference, here, Dimon said: “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.”
Dimon said if any JPMorgan traders were trading the cryptocurrency, “I would fire them in a second for two reasons: It is against our rules and they are stupid, and both are dangerous”.
Dimon’s comments come as the bitcoin, a virtual currency not backed by any government, has more than quadrupled in value since December to more than US$4,100 (RM17,220).
Bitcoin is a digital currency that enables individuals to transfer value to each other and pay for goods and services bypassing banks and the mainstream financial system.
While banks have largely steered clear of bitcoin since it emerged following the financial crisis, the virtual currency has a range of people who support it, including technology enthusiasts, liberterians sceptical of government monetary policy and speculators attracted by its price swings.
“Like it or not, people want exposure to bitcoin,” said CBOE Holdings Inc chairman and chief executive officer Edward Tilly at the conference.
CBOE has applied with the United States regulators to launch a bitcoin futures contract and a bitcoin exchange traded fund on its venues.
Any good trade was started with a difference of opinion, said Tilly.
“So Jamie can be on the short side and the issuers and those trading in physical can be on the long side, and it sounds like we have a great trade.”
Dimon may also be on the other side of another bitcoin trade closer to home.
He said one of his daughters had bought some bitcoin.
“It went up and she thinks she’s a genius now,” said Dimon at the CNBC Institutional Investor Delivering Alpha Conference.
Dimon predicted big losses for bitcoin buyers.
“Don’t ask me to short it. It could be at US$20,000 before this happens, but it will eventually blow up,” he said.