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JPMorgan's Dimon says bitcoin 'is a fraud'

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JPMorgan's Dimon says bitcoin 'is a fraud'

 

2017-09-12T190239Z_2_LYNXNPED8B1TZ_RTROPTP_3_MILKEN-CONFERENCE-DIMON.JPG

Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2017. REUTERS/Mike Blake


NEW YORK (Reuters) - Bitcoin "is a fraud" and will blow up, Jamie Dimon, chief executive of JPMorgan Chase & Co <JPM.N>, said on Tuesday.

 

Speaking at a bank investor conference in New York, 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 that if any JPMorgan traders were trading the crypto-currency, "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 $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 skeptical of government monetary policy and speculators attracted by its price swings.

 

"Like it or not, people want exposure to bitcoin," Edward Tilly, chairman and CEO of exchange group CBOE Holdings Inc. <CBOE.O>, said at the same conference.

 

CBOE has applied with U.S. 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, 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.”

 

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

 

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

 

"It went up and she thinks she's a genius now," Dimon said at the CNBC Institutional Investor Delivering Alpha Conference.

 

"WORSE THAN TULIP BULBS"

 

Banks and other financial institutions have been concerned over bitcoin's early association with online crime and money laundering.

 

The supply of bitcoin is meant to be limited to 21 million, but there are clones of the virtual currency in circulation which have made the market for it more volatile.

 

"It is worse than tulips bulbs," Dimon said, referring to a famous market bubble from the 1600s.

 

JPMorgan and many of its competitors, however, have invested millions of dollars in blockchain, the technology that tracks bitcoin transactions. Blockchain is a shared ledger of transactions maintained by a network of computers on the internet.

 

Dimon said such uses will roll out over coming years as it is adapted to different business lines.

 

Financial institutions are hoping blockchain can be adapted to simplify and lower the costs of processes such as securities settlement, loan trading and international money transfers.

 

Dimon predicted big losses for bitcoin buyers. "Don't ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up." he said.

 

"Honestly, I am just shocked that anyone can't see it for what it is."

 

Bitcoin’s price fell as much as 4 percent following Dimon's comments and was last trading at $4,164. Rumors that the Chinese government is planning to ban trading of virtual currencies on domestic exchanges has weighed on bitcoin recently.

 

"It feels like we are in the midst of a negative news cycle, but even considering all this, we are still trading above $4,000." said John Spallanzani, chief macro strategist at GFI Group.

 

(Reporting by David Henry and Anna Irrera in New York Additional reporting by John McCrank, Angela Moon and Lawrence Delevingne; Editing by Steve Orlofsky and Jonathan Oatis)

 

 
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-- © Copyright Reuters 2017-09-13
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inThailand    1,157

This is a well respected finance expert. His comments maybe a little self serving, but its sure to rattle the bitcoin market.

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connda    4,480

"It's a fraud', well unless Mr. Dimon, Mr. Blankfein, and friends are controlling the show and are harvesting the lion's share of the profits.  Blockchain will come to the banking industry, then whatever products that GS, JPM, et.al. create using blockchain technology will become - the true and legitimate currencies for the world.  
In the meantime, watch the IMF and 'distributed ledgers.'  Last man standing.

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SGD    249

So because the Rothschilds can't control this they say it is flawed ?

 

Somewhat typical approach !

 

BTW - I think it may well implode as well.

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phycokiller    1,023

the banks are finally realizing its a threat to their business. did I mention poppy bubble and the word fraud? pretty childish response really. oh, and someones going to die, then the governments will step in. I mean kindergarten talk can be effective as trump proved but are those the people investing in bitcoin? dying from bitcoin? hard to take the guy seriously

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impulse    12,052

Three words:

 

Pot.   Kettle.   Black.

 

BTW, I support Bitcoin (and others) as digital currencies.  But they've been hijacked by speculators and other get-rich-quickers.  Just like the mainstream financial markets.

 

Edited by impulse
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does    419

Can someone explain how governments could tolerate bitcoin if they can't control and tax it? Bit coins is "fiat" currency but consider whose "fiat" it is.

 

The technology may be clever but if bit coin would spread like wildfire and even get to 10% of all transactions, the global economy would collapse.

 

Do bit coiners really think the US national debt of $20 trillion and massive pension funds obligations can be serviced with with bitcoins? If not, who will pay your pension?

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BuaBS    1,949
6 hours ago, does said:

The technology may be clever but if bit coin would spread like wildfire and even get to 10% of all transactions, the global economy would collapse.

Let's hope so .

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Mansell    517
29 minutes ago, BuaBS said:

Let's hope so .

That is a real bright comment...so you want chaos in the streets, people robbing each other, and a complete meltdown of all the world's economies? Where are you going to park your fragile ass when all this happens? Oh, you never thought of that. Surprise! Dumb is, as dumb says.

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Dumbastheycome    633
6 hours ago, does said:

Can someone explain how governments could tolerate bitcoin if they can't control and tax it? Bit coins is "fiat" currency but consider whose "fiat" it is.

 

The technology may be clever but if bit coin would spread like wildfire and even get to 10% of all transactions, the global economy would collapse.

 

Do bit coiners really think the US national debt of $20 trillion and massive pension funds obligations can be serviced with with bitcoins? If not, who will pay your pension?

The concept  will lead  to a superceding  equivalent. Bitcoin  is  the  experiment. 

Nice  way  to  eliminate 20 trillion debt  is  it  not?

Pension? Maybe  a  free  headstone.

 

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BuaBS    1,949
10 hours ago, BuaBS said:

the global economy would collapse.

Big exaggeration . A shake up of the world economy would be great to deflate all the bubbles of 10 years of QE.

No complete chaos , Mansell !

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BANGKOK 27 September 2017 04:43
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