JP­Mor­gan CEO warns he will fire traders who bet on bit­coin

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NEW YORK: JP­Mor­gan Chase & Co chief ex­ec­u­tive of­fi­cer Jamie Di­mon said he will fire any em­ployee trad­ing bit­coin for be­ing “stupid.”

The cryp­tocur­rency “won’t end well,” he told an in­vestor con­fer­ence in New York on Tues­day, pre­dict­ing it will even­tu­ally blow up. “It’s a fraud” and “worse than tulip bulbs.”

If a JP­Mor­gan trader be­gan trad­ing in bit­coin, he said: “I’d fire them in a sec­ond. For two rea­sons: It’s against our rules, and they’re stupid. And both are dan­ger­ous.”

Bit­coin has soared in re­cent months, spurred by greater ac­cep­tance of the blockchain tech­nol­ogy that un­der­pins the ex­change method and op­ti­mism that faster trans­ac­tion times will en­cour­age broader use of the cryp­tocur­rency.

Prices have climbed more than four-fold this year – a run that has drawn de­bate over whether that’s a bub­ble.

Bit­coin ini­tially slipped af­ter Di­mon’s re­marks. It was down as much as 2.7% be­fore re­cov­er­ing.

Last week, it slumped af­ter re­ports that China plans to ban trad­ing of vir­tual cur­ren­cies on do­mes­tic ex­changes, deal­ing an­other blow to the US$150bil cryp­tocur­rency mar­ket.

Tulips are a ref­er­ence to the ma­nia that swept Hol­land in the 17th cen­tury, with spec­u­la­tors driv­ing up prices of vir­tu­ally worth­less tulip bulbs to ex­or­bi­tant lev­els. That didn’t end well.

In bit­coin’s case, Di­mon said he’s scep­ti­cal au­thor­i­ties will al­low a cur­rency to ex­ist with­out state over­sight, es­pe­cially if some­thing goes wrong.

“Some­one’s go­ing to get killed and then the govern­ment’s go­ing to come down,” he said.

“You just saw in China, gov­ern­ments like to con­trol their money sup­ply.”

Di­mon dif­fer­en­ti­ated be­tween the bit­coin cur­rency and the un­der­ly­ing blockchain tech­nol­ogy, which he said can be use­ful.

Still, he said banks’ ap­pli­ca­tion of blockchain “won’t be overnight.”

The bank chief said he wouldn’t short bit­coin be­cause there’s no telling how high it will go be­fore it col­lapses.

The best ar­gu­ment he’s heard, he said, is that it can be use­ful to peo­ple in places with no other op­tions – so long as the sup­ply of coins doesn’t surge.

“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.”—

AFP

Tough stand:

Di­mon has warned that he will fire JP­Mor­gan traders who traded in bit­coin ‘in a sec­ond. For two rea­sons: It’s against our rules, and they’re stupid. And both are dan­ger­ous.’ —

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