Dimon: Bitcoin a Fraud, Worse Than Tulip Bubble

Bitcoin flash-crashed once again following Friday’s scary move, this time after the comments of a prominent Wall Street veteran, who slammed the currency today afternoon in New York. According to Bloomberg, the CEO of the bank said at an investment conference that

Bitcoin won’t end well, (…) It’s a fraud” and “worse than tulip bulbs.

The “flash-crash” on the 5-minute chart

The cryptocurrency, and the whole segment took a hit, with the market cap of the 100 most valuable coins falling by $6 billion after the comments, and Bitcoin itself declining by more than 5% in a matter of minutes. He also told the attendees that he would fire anyone trading BTC under his watch, and reiterated the old, dirty money remarks and the illegal use of the decentralized currency. On another note, he said that he wouldn’t short Bitcoin as the price of the coin could reach new highs and there is no telling where the “bubble” will top out.

Correction Already Underway

BTC already vulnerable thanks to the overbought readings on the daily chart

With the sector already being pushed lower by a new wave of legislation in China, the remarks could cause another sell-off, although the banker didn’t say anything that hasn’t been told by other establishment players. We have been calling for a correction in the sector for weeks now after the monster rally off the July lows in the major coins, but the long-term uptrend seems unscathed even after the 20+% declines in the most important currencies.

With the overbought readings still not fully being cleared on the daily chart, we expect more downside in the currency and the sector, but buying opportunities should soon emerge. As it was the case before, these comments are unlikely to change the trend of adoption in the case of Bitcoin and the underlying blockchain technology.

Featured Image from Shutterstock

 

Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.
Comments
    • Now they decided on a daily basis fire out loud on an effort to bring prices down and scare traders and investors away. I wish somehow cryptocurrency come up to the rescue of the planet financial crisis next.

  • Hard to take seriously someone who accepted a half-trillion dollar interest-free loan, funded by taxpayers and incurred partly because of financial mismanagement on his watch.. or who then had to appear before a Senate committee to justify $3 billion in trading losses that proved he was “dead wrong” about his preconceptions… or who disses his own daughter for trading in Bitcoin… or whose compensation package is (rather unambitious, this) based on “keeping JPMorganChase out of the bottom five in a ranking of 12 major banks”… and so on, and so forth.

    I believe the term we are looking for here is “asshat”.

  • I find it hard to believe that a clueless wall street banker, glorified by no one except the media could influence price action, much less a flash crash in a brand new technology designed to relegate the likes he. It should have more to do with the news from china and the banning or regulation of exchanges

  • An extremely volatile crypto currency does not make economic sense. Blockchain could have future but that necessarily does not need to be accompanied by exchange traded currencies. It is good that ICO is banned(it should be banned everywhere) as it is fraud.
    Just because we want to make money(me included) makes something right

  • How can a ban in ICOs be a good thing. Because there are “fake” businesses? That’s a good enough reason, to avoid scams? I mean, you’re banning companies from funding their own businesses with cryptocurrency. How can that be a good thing, that’s what i would like to understand. Maybe because not all ICOs actually need a blockchain to operate? wouldn’t that be like saying to not invest in a company 20 years ago, simply because they didn’t need the “internet” to operate their business?

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