J.P. Morgan Chase & Co. boss Jamie Dimon just leveled one of the harshest criticisms about bitcoin and the broader digital-currency sector to date.
Speaking at a banking industry conference organized by Barclays BCS, +3.16%Dimon compared the rapid ascent of bitcoin BTCUSD, -7.78% with the 17th century mania over tulip bulbs — viewed as a classic, textbook bubble — and predicted that things may end just as badly for investors in the decentralized currency, which has been surging over the past year.
“Bitcoin will eventually blow up. It’s a fraud. It’s worse than tulip bulbs and won’t end well,” Dimon said.
Dimon also said he would fire any trader trading bitcoin for being “stupid.”
Speaking at CNBC’s Delivering Alpha conference late Tuesday afternoon, Dimon reiterated that “bitcoin is not a real thing and it’s solely speculative and that there’s no need for it in the US.”
Bitcoin prices fell about 2% to trade at $4,107 on Tuesday, according to digital-currency site Coindesk.com. Bitcoin prices peaked at above $5,000 on Sept. 1, but plunged 18% since then following unverified reports about plans by Chinese authorities to shut down bitcoin exchanges in the country. China’s regulators last week declared so-called initial coin offerings illegal, dealing a blow to all digital currencies.
Wall Street reacted swiftly to the verbal bashing from one of the world’s more prominent bankers about the upstart digital-currency market.
Bitcoin’s biggest rival, Ether tokens, trading on the Ethereum blockchain, were down nearly 3% Tuesday at $289.
Still, the year-to-date gains for bitcoin are stunning. Bitcoin is up more than 300% since the start of 2017.
But Ether’s 3,600% gains since January dwarfs traditional stock returns.