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.