JPMorgan CEO: Bitcoin is a fraud and I would fire its traders in seconds

▶ Jamie Dimon warns investors against the ‘invented’ virtual currency in damning indictment in New York

Bitcoin “is a fraud” and will blow up, according to Jamie Dimon, the chief executive of JPMorgan Chase. Speaking at a bank investor conference in New York on Tuesday, Mr 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.”

Mr Dimon said that 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.”

Mr Dimon’s comments come as bitcoin, a virtual currency not backed by any government, has more than quadrupled in value since December to more than US$4,100.

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,” Edward Tilly, the chairman and chief executive of exchange group CBOE Holdings (CBOE), said at the same conference.

On Tuesday, The National reported that the Central Bank of the UAE is nearing completion of a review of virtual currencies that may lead to new regulations on the use of digital currencies such as bitcoin.

According to a person familiar with the matter, the review is considering ways other governments around the world have responded to the challenge of digital currencies, which have been favoured by criminals and money launderers due to lack of regulations.

Bitcoin, which is legal in the UAE, has started to gain traction in the highlighting the importance of clear regulations. Fam Properties, a Dubai real-estate broker, for example, said that some landlords will start accepting bitcoin payments at the new property development City Walk in Jumeirah.

CBOE has aligned with US regulators to launch a bitcoin futures contract and a bitcoin exchange traded fund on its venues.

Any good trade is started with a difference of opinion, Mr Tilly added. “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.”

Mr Dimon may also be on the other side of another bitcoin trade closer to home.

At another conference about two hours later, Mr Dimon said that one of his daughters had bought some bitcoin.

“It went up and she thinks she’s a genius now,” Mr Dimon said at the CNBC Institutional Investor Delivering Alpha Conference.

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 EDWARD TILLY Chairman and CEO of CBOE Holdings