JPMorgan Chase CEO calls Bicoin “A Fraud”

Crypto Consumer
3 min readOct 25, 2017

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There has been a huge uproar surrounding digital currency and the blockchain technology that supports it. It is a clear threat to national banks, as it represents a decentralized currency without the need for a third party to verify the transaction. Bitcoin, the most notable of the digital currencies, has recently found its price surge to levels near $6,000. There are many questions surrounding the legitimacy of the currency, and clearly a plethora of risks that come with choosing it as an investment option.

In order to understand the associated risks, it is important to look at the global picture. The Russian Central Bank had recently declared that it will be shutting down digital currency exchanges. The Chinese government had a similar reaction very recently. This is in part because of the wide range of corruption that occurs with the fluid and international exchange of digital coins. Many investors have piled into Bitcoin expecting more of the large returns that have resulted over the past few months. But how has the United States responded? For the most part the US has yet to make a stance on cryptocurrency. There has been mixed opinions as some brokerages are seeking to create exchange traded funds for cryptocurrency, but others have clearly stood against it.

In September of this year, Jamie Dimon, the chief executive officer of JPMorgan Chase, made his stance on Bitcoin quite clear. Dimon stated that Bitcoin is “a fraud” and “worse than the tulip bulb crisis.” For those that are unfamiliar with the tulip bulb crisis, in the early 1600’s tulip bulbs saw a sudden explosion in investment value, trading hands multiple times a day for extreme and unrealistic values. The collapse of the tulip bulb value left many in financial ruin. Dimon made it clear that he has no idea where the ceiling for the Bitcoin market will land, but that this digital currency has no clear legal support and is a dangerous investment. He has come on the record stating that he would fire any of his employees that are caught trading or investing in digital currency. Not soon after the response from Dimon, the chief executive officer of Goldman Sachs, Lloyd Blankfein, stated that he was still making a decision about digital currency and whether or not to make it a part of their investment options.

The volatility of digital currency over the past week alone has been cause for concern for many. The price level fluctuated over a $600 range yesterday alone. When the Chinese government issued its ban on digital currency exchanges, the price of Bitcoin plummeted. This indicates that while many have jumped in to invest in the currency, a bubble may be forming very quickly. The value of Bitcoin and digital currency depends heavily on the global response from national banks and governments. Russia’s recent decision to pursue the creation of its own legalized digital currency is a huge cause for concern among the existing cryptocurrency community. While it is impossible to know when Bitcoin will crash, or how long it can sustain its momentum, it is clear that there are huge risks associated with investing in digital currency. And if Dimon is even remotely correct about the potential severity of a bursting Bitcoin bubble, there may be wiser investment options.

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Crypto Consumer

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