CEO JP Morgan is convinced: Bitcoin is a Fraud

JPMorgan CEO Jamie Dimon says bitcoin is worse than the most infamous asset bubble in history. Speaking at a banking conference in New York, Dimon said he would fire “in a second” anyone at the investment bank found to be trading in bitcoin. “For two reasons: it’s against our rules, and they’re stupid. And both are dangerous.”

He added: “The currency isn’t going to work. 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.

Bitcoin has been steadily rising over the past year. In fact, the price of a bitcoin has fallen about 10% in the past week on worries about more regulations in China.

Even Dimon's own bank, JPMorgan, has reportedly begun a trial project using blockchain as it tries to cut trading costs. Blockchain is the technology behind bitcoin.

Bitcoin is a digital currency that enables individuals to transfer value to each other and pay for goods and services bypassing banks and the mainstream financial system.

While banks have largely steered clear of bitcoin since it emerged following the financial crisis, the virtual currency has a range of people who support it, including technology enthusiasts, liberterians skeptical of government monetary policy and speculators attracted by its price swings.

Dimon also alluded to the fact that bitcoins have been associated with criminal activities as well. But "wait until someone gets hurt, or someone uses it for illicit purposes, – and they're using it for some illicit purposes right now – they'll shut it down", Dimon said.

"I'm not saying 'go short bitcoin and sell $100,000 of bitcoin before it goes down," he said. "This is not advice of what to do. My daughter bought bitcoin, it went up and now she thinks she's a genius."

In an appearance at a separate conference earlier in the day, Dimon said bitcoin mania is reminiscent of the tulip bulb craze in the 17th century.

Dimon predicted big losses for bitcoin buyers. “Don’t ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up.” he said.

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

Bitcoin’s price fell as much as 4 percent following Dimon’s comments and was last trading at $4,164. Rumors that the Chinese government is planning to ban trading of virtual currencies on domestic exchanges has weighed on bitcoin recently.