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JPMorgan: The cryptocurrency market looks a like a pyramid scheme


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https://finance.yahoo.com/news/jp-morgan-cryptocurrency-market-looks-like-pyramid-scheme-183008361.html?_fsig=JshThIeeJ29sDeFlKVuCEQ--

 

JPMorgan (JPM) strategist Marko Kolanovic has some strong words for the cryptocurrency markets that are dominating the conversation right now, using the two words no one in the investing world ever wants to see: pyramid scheme.
 
“Cryptocurrencies cannot be reliably valued and they have significant ‘tail risk’ that could come in the form of a regulatory ban,” said Kolanovic in a note published Wednesday. “Moreover, the whole cryptocurrency market exhibits some parallels to fraudulent pyramid schemes.”
 

“Worse than tulip bulbs”

 

On Tuesday, Kolanovic’s boss Jamie Dimon — CEO of the Wall Street bank — said the bitcoin craze we’ve seen this year is “worse than tulip bulbs,” a reference to the tulip mania of the 1600s. Dimon added that, “if [JPMorgan] had a trader who traded bitcoin I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. Both are dangerous.”

 

Critics of Dimon’s comments will note that Dimon both “doesn’t get” bitcoin and that, if bitcoin and related technologies are going to undermine the primacy of the modern banking system, he would of course dismiss it.

 

Elsewhere on Tuesday, Bank of America Merrill Lynch’s latest fund manager survey indicated that going long bitcoin is seen as the market’s most crowded trade right now.

 

Investment manager Patrick O’Shaughnessy also said Tuesday that after a presentation on value investing delivered to a room of investment industry pros, the first question was about bitcoin.

 

 

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all currency, whether a medium of exchange or a cyber value, is a pyramid scheme.

currency yes but the system in place for trading stocks/investments/currencies is regulated while bitcoin and cryptos in general are not.

 

Insider trading, price manipulation, shorting, pump and dump etc are not illegal with crypto because its all unregulated.

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