Jamie Dimon the CEO of JPMorgan has said that Bitcoin is a fraud and it is worse than the most famous asset bubble in history – tulip bulbs. This will not be the first time that Bitcoin and in fact the entire concept of cryptocurrency has faced criticism but it is coming at a time when more and more people were getting comfortable with the entire cryptocurrency game.
Bitcoin had been enjoying an upward climb undeterred by even a split that saw the creation of Bitcoin cash even crossing $4000 at a point as tensions around the world seemed to make people turn to it as a disaster hedge in the case of a war. Lately, however, the tide seems to have been stemmed and the price of Bitcoin is now definitely below $4000.
It is this steady fall that may give a lot of credence to the words of Jamie Dimon at the Barclays Conference on Tuesday that Bitcoin is a fraud. He said that the cryptocurrency is “worse than tulip bulbs,” a reference to the arrival and boom of the tulip plant in 17th-century Europe.
In tulip bulb happened in Holland during the early 1600s and is now one of the most famous market bubbles of all time. The market for tulip bulbs had boomed as people speculated on its price but it all finally ended in panic selling.
A lot of people traded or sold possessions to participate in the tulip market mania and when it all came to an end in 1637, the prices dropped and panic selling began. The tulip bubbles were soon trading at a fraction of what they once had, leaving many people in financial ruin.
Jamie Dimon pointed out that Bitcoin had rocketed more than 350% this year while exploding in popularity, particularly in Asia before saying that this rally “won’t end well.”
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Jamie Dimon is not alone in his doubts about Bitcoin although he may be the only one to go as far as suggesting that Bitcoin is a fraud and also saying that he would fire any trader that transacted Bitcoin for being stupid. A number of fund managers surveyed by Bank of America Merrill Lynch in September also said that betting on Bitcoin’s continued rise was the “most crowded” trade.
Robert Shiller, the Nobel-winning author who predicted the housing and tech bubbles, also recently doubled down on his view Bitcoin is a bubble, telling Quartz it was the “best example right now” of one.