Bitcoin, ethereum and other major cryptocurrencies have crashed back in the wake of a brutal Federal Reserve “sledgehammer” that could trigger a crash worse than 2008.
The bitcoin price has plummeted under $20,000 this month, pushed lower by a stark Biden administration crypto warning. Meanwhile, the ethereum price has recorded even steeper declines after its game-changing upgrade sparked a surprise U.S. Securities and Exchange Commission (SEC) alert.
Now, JPMorgan chief executive Jamie Dimon has echoed Bill Gates And Warren Buffett in branding bitcoin, ethereum and other cryptocurrencies “decentralized Ponzi schemes.”
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“I’m a major skeptic on crypto tokens, which you call currency, like bitcoin,” Dimon said during congressional testimony this week it was reported by Bloomberg. “They are decentralized Ponzi schemes” and “dangerous,” he added.
Earlier this year, following a China crypto ban in 2021, executives at China’s Blockchain-based Service Network (BSN), a state-backed initiative designed to drive the commercial adoption of blockchain technology, also called bitcoin and cryptocurrencies a Ponzi scheme—declaring it “the biggest in human history.”
Dimon’s crypto criticism echos similar comments made by Microsoft
The bitcoin and crypto market last year soared to an eye-watering $3 trillion, up from well under $1 trillion in 2020, only to crash back through 2022—plunging the nascent crypto industry into turmoil, sending the price of some cryptocurrencies to zero and triggering a burst of regulatory interest in the market.
“The notion that [bitcoin and crypto is] good for anybody is unbelievable,” Dimon said, pointing to cryptocurrency’s role in ransomware attacks, sex trafficking and money laundering. Dimon famously called bitcoin a “fraud” in 2017 before somewhat walking back his comments. In 2014, he branded bitcoin “a terrible store of value.”
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However, Dimon did also say he’s accepted “properly regulated” stablecoins—cryptocurrencies that are pegged to traditional currencies—as well as blockchain-based decentralized finance (DeFi) that replaces banks with algorithms have some use and declaring JPMorgan “a big user of blockchain.”
JPMorgan has spearheaded Wall Street’s adoption of crypto and blockchain, allowing its wealth management clients to buy bitcoin, ethereum and a handful of other cryptocurrencies, creating its own JPM coin blockchain and cryptocurrency and becoming the first big bank to step into the virtual metaverse earlier this year—something some think could help popularize blockchain-based digital assets.