TECHNOLOGY

JP Morgan boss says he would dismiss anyone trading Bitcoin

Banking boss attacks cryptocurrencies as a scam and compares them to Tulip bubble.

By John Bakie john.bakie@strategic-i.com September 13, 2017 10:05 AM GMT

JP Morgan boss Jamie Dimon has said he would fire “in a second” anyone at his firm who was trading in digital currency Bitcoin.

Speaking at the Delivering Alpha conference in New York, Dimon launched an attack on Bitcoin saying it was a fraud that would eventually blow up.

Bitcoin has risen to prominence in recent years as the original cryptocurrency, a digital currency created by computers solving problems and which can be exchanged like cash. Bitcoin users can remain anonymous in transactions, resulting in it predominantly being used for buying drugs and weapons online.

The currency has proved volatile, but gains have been significant with the value of 1 bitcoin going from just a few dollars in 2012 to over $4,000 today.

Dimon compared the phenomenon to the Dutch Tulip Mania in the 1600s, where a speculative bubble around tulip bulbs led them to command exorbitant prices before the market collapsed.

Speaking at Delivering Alpha, Dimon said he would fire any JP Morgan employee found trading bitcoin: ““For two reasons: it’s against our rules, and they’re stupid. And both are dangerous.”

“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,” he said.

He said dictators, drug dealers and murderers were the primary beneficiaries of digital currencies like Bitcoin.

Dimon’s speech coincided with new Financial Conduct Authority guidance on cryptocurrency offerings in the UK, which warned investors should be prepared to lose all their money if they investment in such schemes.

The attack is one of the fiercest on Bitcoin by someone as high profile as Dimon and the currency fell 4% after his comments. However, banks have also been keen to exploit the blockchain technology that underpins Bitcoin, believing it could deliver a range of benefits for more traditional banking and investment activities.