- JPMorgan’s Marko Kolanovic compared bitcoin trading to
fraudulent pyramid schemes, reinforcing JPMorgan CEO Jamie Dimon’s
criticism earlier this week. - Bitcoin surged more than 10 percent on Friday, but was still on
track for a big weekly loss during a tumultuous period of
trading. - Bitcoin plunged about 13 percent Thursday after one of the
biggest exchanges in China said it will shut down its
operation.
JPMorgan’s top quant strategist backed his boss this week in
bashing bitcoin, warning that the cryptocurrency is likely a
“pyramid scheme.”
Marko Kolanovic, the bank’s global head of quantitative and
derivatives strategy, said in a note on Wednesday, “It is believed
that an unknown person (or persons) known as ‘Satoshi Nakamoto’,
before disappearing, mined the first 1-2 million coins or about 10
percent of the coins that will ever exist.”
He added, “Mining becomes progressively more difficult, and
eventually unprofitable,” arguing that the cryptocurrency resembles
a fraudulent pyramid scheme.
Bitcoin surged more than 10 percent on Friday,
but was still on track for a big weekly loss during a tumultuous
period of trading.
Earlier this week, JPMorgan CEO Jamie Dimon called bitcoin a
“fraud,”saying that the cryptocurrency “won’t end well.” Dimon
was speak at the Delivering Alpha conference presented by CNBC and
Institutional Investor.
Bitcoin plunged about 13 percent Thursday after one of the biggest exchanges in China said it will
shut down its operation. BTC China said in a tweet Thursday
that it will close down its operations by Sept. 30 as Chinese
authorities crack down on cryptocurrencies.
But to be sure, many see bitcoin as a huge opportunity.
Former JPMorgan strategist Tom Lee said the cryptocurrency could
surge another 600 percent in five years. “I unequivocally believe
bitcoin is your best investment to the end of the year,” the
Fundstrat co-founder told CNBC, standing by similar remarks he made
Aug. 9 on “Fast Money.”
“It’s not worth it to look at bitcoin two months, two weeks
ahead,” Lee argued, saying he still believes each bitcoin will be
worth $25,000 in five years.
An unconvinced Kolanovic rattled off a number of risks presented
by bitcoin including its documented volatility and the inability to
properly value the coins without a proper “economy.”
“Perhaps more importantly, there is no organized power behind
this currency to e.g. ensure its long term viability, secure trade,
enforce its acceptability for goods and services, or provide
investor fraud protection,” he explained.
“If the use of cryptocurrencies were to increase to an extent
that they start competing with traditional ‘country’ currencies
they would be quickly regulated or outlawed.”
- JPMorgan’s Marko Kolanovic compared bitcoin trading to
fraudulent pyramid schemes, reinforcing JPMorgan CEO Jamie Dimon’s
criticism earlier this week. - Bitcoin surged more than 10 percent on Friday, but was still on
track for a big weekly loss during a tumultuous period of
trading. - Bitcoin plunged about 13 percent Thursday after one of the
biggest exchanges in China said it will shut down its
operation.
JPMorgan’s top quant strategist backed his boss this week in
bashing bitcoin, warning that the cryptocurrency is likely a
“pyramid scheme.”
Marko Kolanovic, the bank’s global head of quantitative and
derivatives strategy, said in a note on Wednesday, “It is believed
that an unknown person (or persons) known as ‘Satoshi Nakamoto’,
before disappearing, mined the first 1-2 million coins or about 10
percent of the coins that will ever exist.”
He added, “Mining becomes progressively more difficult, and
eventually unprofitable,” arguing that the cryptocurrency resembles
a fraudulent pyramid scheme.
Bitcoin surged more than 10 percent on Friday,
but was still on track for a big weekly loss during a tumultuous
period of trading.
Earlier this week, JPMorgan CEO Jamie Dimon called bitcoin a
“fraud,”saying that the cryptocurrency “won’t end well.” Dimon
was speak at the Delivering Alpha conference presented by CNBC and
Institutional Investor.
Bitcoin plunged about 13 percent Thursday after one of the biggest exchanges in China said it will
shut down its operation. BTC China said in a tweet Thursday
that it will close down its operations by Sept. 30 as Chinese
authorities crack down on cryptocurrencies.
But to be sure, many see bitcoin as a huge opportunity.
Former JPMorgan strategist Tom Lee said the cryptocurrency could
surge another 600 percent in five years. “I unequivocally believe
bitcoin is your best investment to the end of the year,” the
Fundstrat co-founder told CNBC, standing by similar remarks he made
Aug. 9 on “Fast Money.”
“It’s not worth it to look at bitcoin two months, two weeks
ahead,” Lee argued, saying he still believes each bitcoin will be
worth $25,000 in five years.
An unconvinced Kolanovic rattled off a number of risks presented
by bitcoin including its documented volatility and the inability to
properly value the coins without a proper “economy.”
“Perhaps more importantly, there is no organized power behind
this currency to e.g. ensure its long term viability, secure trade,
enforce its acceptability for goods and services, or provide
investor fraud protection,” he explained.
“If the use of cryptocurrencies were to increase to an extent
that they start competing with traditional ‘country’ currencies
they would be quickly regulated or outlawed.”