International

Bitcoin in sharp drop after Dimon ‘tulip bulbs’ barb

A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier/Illustration/File Photo

JPMorgan Chase chief executive Jamie Dimon sent bitcoin prices into a sharp fall after branding the cryptocurrency a “fraud” that was “worse than tulip bulbs”. Bitcoin’s value fell some 20 per cent against the dollar after the world’s best-paid banker used a speech to liken the currency’s valuation to the infamous tulip bubble in the 17th century. That ended when people tried to cash in the vastly-overvalued tulips they had traded on the stock market. With no buyers willing to pay the exorbitant prices, the market went into freefall and some lost their life savings.

Bitcoin’s price had risen from about $250 per unit at the end of 2015 to about $4,200. It is now at about $3,400. China’s decision to ban all trading of the virtual currency from the end of the month also contributed to last week’s fall.

“Don’t ask me to short it [bitcoin], it could be at $20,000 before this happens but it will eventually blow up. It’s a fraud and honestly I’m just shocked anyone can’t see it for what it is,” Mr Dimon told investors at Barclays’ financial conference in New York on Tuesday.

“The only good argument I’ve ever heard . . . is that if you were in Venezuela or Ecuador or North Korea . . . or if you were a drug dealer, a murderer, stuff like that, you are better off dealing in bitcoin than in US dollars, you are better off bypassing the system of your country even if what I just said is true.”

His comments were dismissed by fintech executives who said Mr Dimon had criticised bitcoin before but the currency continued to surge.

 
A version of this article appeared in the print edition of The Daily Star on September 18, 2017, on page 16.

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