Bitcoin Is 'Fraud,' Cryptocurrency Bubble Will Collapse, Says JPMorgan CEO Jamie Dimon

JPMorgan Chase & Co. CEO Jamie Dimon predicts government officials will shut down cryptocurrencies such as bitcoin after someone “gets killed,” adding that he would fire any “stupid” employee if they’re found to be trading bitcoin.

JPMorgan’s Chief Executive Officer, who previously served on the Board of Directors of the Federal Reserve Bank in New York, compared bitcoin to the “Tulip Mania” economic bubble that swept Holland in the 17th Century, Bloomberg first reported. Dimon told an investor conference in New York Tuesday that cryptocurrency investments “won’t end well” because they are a “fraud.”

Lending to Dimon’s clout on Wall Street and across economic circles, bitcoin slipped 1 percent almost immediately following his remarks. But this comes as bitcoin’s value has soared in recent months within the $150 billion cryptocurrency market. Faster transaction times and generally increased acceptance of the blockchain technology used to exchange cryptocurrency has seen several high-profile investors including Mark Cuban, John McAfee and even actress Gwyneth Paltrow. Bitcoin prices have risen more than four-fold this year, prompting debate over its exposure to an economic bubble.

But Dimon dismissed the entire market as “stupid” and went so far as to say he’d fire any Chase employee trading bitcoin. He declined to short bitcoin because there’s no current way to tell how high the price will go before his predicted collapse.

“I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous,” Dimon told the investors Tuesday.

He specifically noted the volatility of having such a market without state oversight, including several black market uses of cryptocurrency such as the narcotics trade. “Someone’s going to get killed and then the government’s going to come down…You just saw China, governments like to control their money supply.”

“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 U.S. dollars,” Dimon said. “So there may be a market for that, but it’d be a limited market.”

Dimon did acknowledge that people in locations with no other options could find bitcoin very useful and that his own daughter has purchased bitcoin. However, the bank chief reiterated his belief that bitcoin will one day face the same fate as the Dutch tulip bubble, although it “won’t be overnight.”

AI/CapitalMarketsNewsweek is hosting an AI and Data Science in Capital Markets conference on December 6-7 in New York. Photo: NewsweekMediaGroup

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