Is bitcoin a fraud?

2017-09-24 19:45Source:FTAuthor:FT
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JPMorgan chief executive Jamie Dimon issued a sharp condemnation of cyrpto-currency bitcoin, declaring that it was a “fraud” that should only be invested in by murderers, drug dealers and people living in North Korea, Ecuador and Venezuela.

“If we had a trader who traded bitcoin I’d fire him in a second for two reasons. One, it’s against our rules. Two, it’s stupid,” the bank boss told the Barclays’ financial conference in New York on Tuesday.

“You can’t have a business where people are going to invent a currency out of thin air,” he added. “It won’t end well… someone is going to get killed and then the government is going to come down on it.”

The value of a single bitcoin is around $4,200. The crypto-currency, which can be manufactured using computing power and is then stored on servers, was valued at less than $250 per unit at the end of 2015.

“Don’t ask me to short it, it could be at $20,000 before this happens but it will eventually blow up. It’s a fraud and honestly I’m just shocked anyone can’t see it for what it is,” Mr Dimon said, describing bitcoin as “worse than tulip bulbs”.

“The only good argument I’ve ever heard … is that if you were in Venezuela or Ecuador or North Korea.. or if you were a drug dealer, a murderer, stuff like that, you are better off dealing in bitcoin than in US dollars, you are better off bypassing the system of your country even if what I just said is true. There may be a market for that but it’s a limited market.”