JPMorgan's Dimon calls bitcoin a 'fraud'

JPMorgan's Dimon calls bitcoin a 'fraud'
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JPMorgan Chase & Co. CEO Jamie Dimon on Tuesday called bitcoin a "fraud" and vowed to fire any employees who trade in the crypto-currency.

“The currency isn’t going to work,” Dimon said at an investor conference in New York, according to reports.

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“It’s a fraud” and “worse than tulip bulbs," he said. 

“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 use of bitcoin — a digital currency without any government oversight that allows buyers to send payments directly to buyers around banks — "won’t end well."

Trading in bitcoin is against JPMorgan's company rules and Dimon said he would fire any employees "in a second" because "they are stupid and both are dangerous.”

He expects that the bottom will eventually drop out of bitcoin. 

"Don’t ask me to short it," he said. "It could be at $20,000 before this happens, but it will eventually blow up.” Dimon said.

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

Since December, bitcoin’s value has increased four-fold, on the growing use of blockchain technology, which records bitcoin transactions. 

Dimon said that blockchain can be useful but its use by banks "won't be overnight."

The main concern is that bitcoin isn't subject to government oversight and could create massive problems if something go awry. 

“Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.”

The JPMorgan head said there may be a "limited market" for the currency. 

“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,” he said. 

Banks have avoided getting involved in bitcoin because of those types of connections to illegal online activity and money laundering.