Bitcoin tanks 11.5% since Jamie Dimon called it ‘a fraud’

Bitcoin continues to slide downwards Wednesday as uncertainty and criticism against the red-hot cryptocurrency mount.

The cryptocurrency was down over 9 percent Wednesday morning at $3,767 a coin, only eleven days after crossing the much-anticipated $5,000 threshold.

Bitcoin has dropped more than 11% since Jamie Dimon, the CEO of JPMorgan, bashed the cryptocurrency on Tuesday in the Barclays Financial Services Conference.

The 61-year-old banker said bitcoin was “a fraud” that would finally blow up. Dimon, a long-time critic of bitcoin, once called it “a terrible store of value” in 2014 through an interview with CNBC.

John Spallanzani, chief macro strategist in GFI Group, tells Business Insider that Dimon’s opinions, however, aren’t the only motive bitcoin is under pressure this morning.

“The negative news cycle proceeds, the UK financial regulator FCA has sounded the alarm over initial coin offerings, and the China crack down,” he explained in an email to Business Insider.

On Tuesday, the UK’s financial watchdog, the Financial Conduct Authority, warned investors about the risk associated with first coin offerings, the cryptocurrency-based fundraising technique. Over $2.1 billion have been raised via the method since the beginning of the year, according to Autonomous NEXT, the financial technology analytics provider. Some businesses have raised millions of dollars in a matter of hours without having a real product. Here is the FCA (emphasis ours):

“ICOs are extremely high-risk, speculative investments. You should be conscious of the dangers involved (highlighted below) and fully research the particular project if you are thinking about buying digital tokens. You should only invest in an ICO job if you’re an experienced investor, confident in the quality of the ICO project itself (e.g. business plan, technology, people involved) and prepared to lose your entire stake.”

Earlier this month, China declared initial coin offerings would be prohibited in the country. A Caixin report out September 8 indicated the China will shut down domestic cryptocurrency exchanges.

Two of China’s largest bitcoin exchanges, Okcoin and Huobi, say they haven’t received any notice from regulators, according to a tweet from Bloomberg’s Lulu Yilun Chen .

In February, China blocked customers from withdrawing their bitcoin. They were eventually allowed to resume withdrawals in June.


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