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Bitcoin’s ‘worthless’ comment by JP Morgan boss continues to drag value down

JP Morgan CEO Jamie Dimon
JP Morgan CEO Jamie Dimon has called bitcoin 'worthless' and said cryptocurrencies will be regulated by governments. Photo: Michel Euler/AFP via Getty (MICHEL EULER via Getty Images)

Cryptocurrencies were broadly lower on Wednesday morning even as bitcoin managed to stay above a key level of $50,000 (£36,687).

Bitcoin’s (BTC-USD) price was down 4%, to trade at $54,983. Ethereum, the world’s second largest crypto by market size, was down about 1% (ETH-USD) and was trading at $3,448.

Just one day earlier, on Tuesday, the price of bitcoin had gone above $57,600 to reach its highest level since 12 May.

Some analysts believe the rally was in part thanks to speculation that the US Securities and Exchange Commission will soon approve a bitcoin exchange-traded fun d(ETF). But others are unsure if an approval will boost bitcoin’s price.


Analysts have also been forecasting that bitcoin will soar to new highs by the end of the year, but bitcoin is still reeling from comments made earlier this week by Jamie Dimon, JP Morgan’s (JPM) CEO.

Read more: Play-to-earn: Inside the crypto gaming industry's funding boost

He had said on Monday that cryptocurrencies will be regulated by governments and that he thinks bitcoin is "worthless." Bitcoin's price has been impacted several times by regulatory crackdowns in many countries, including China and the UK.

At a virtual event held by the Institute of International Finance, he said: "No matter what anyone thinks about it, government is going to regulate it. They are going to regulate it for [anti-money laundering] purposes, for [Bank Secrecy Act] purposes, for tax.

However, he said his personal views would not stop the bank from offering crypto-related products to its clients.

"Our clients are adults. They disagree. That’s what makes markets. So, if they want to have access to buy yourself bitcoin, we can’t custody it but we can give them legitimate, as clean as possible, access.”

Bitcoin's price was down on Wednesday morning. Chart: Yahoo Finance UK
Bitcoin's price was down on Wednesday morning. Chart: Yahoo Finance UK

Wael Makarem, senior market strategist at Exness, told Yahoo Finance UK that the drawdown in bitcoin's price "falls under the category of corrections, as investors ran into partial profit taking following a tremendous rally since July."

"The optimism over the approval of bitcoin-based ETFs by the SEC anytime soon will continue to support a buying-the-dip scenario in the coming weeks," he said.

Meanwhile over the weekend, Nigel Green, CEO of deVere Group, had predicted that controversies regarding tether, a stablecoin, “are likely to cause short-term volatility in the cryptocurrency market, affecting the prices of bitcoin, ethereum and others.”

A Bloomberg report has been critical of tether.

"The turbulence triggered by the tether troubles is likely to weigh on the prices of cryptocurrencies including bitcoin and ethereum, pulling back slightly the impressive upside run that they have been experiencing so far this month.”

But Green is still confident that if the current momentum in prices continues, bitcoin could hit could hit all-time highs of $100,000 this year.

Earlier this week Freddie Evans, sales trader at digital asset broker GlobalBlock said: “With technical indicators looking bullish the next key resistance is at $60,000 and if it breaks through we could have an exciting run until Christmas.”

Read more: Global supply chains and net zero to dominate G7 talks

The volatility comes amid several developments in the crypto space.

Coinbase (COIN) is launching a marketplace for non-fungible tokens (NFTs) that will let users collect and trade NFTs. Users can sign up to a waitlist for early access to the feature.

“Our mission at Coinbase is to increase economic freedom in the world. By enabling more people to join the creator economy and profit from their work, NFTs have an important role to play in this mission,” the company said.

“If you’ve tried to create or purchase an NFT, you’ve probably found the user experience lacking. We can help,” it added.

Meanwhile Binance, the world's largest cryptocurrency exchange, has launched a $1bn growth fund to support and fast-track innovations in the blockchain technology and digital asset adoption.

Read more: How London is becoming the centre for digital art and NFT auctions

“The company has been the subject of intense scrutiny in a number of countries, including the United States, Singapore, and South Africa, in recent months, as the digital sector has reached a volume and valuation that has piqued regulators' interest,” said chief market analyst at AvaTrade Naeem Aslam.

“However, the company has welcomed regulatory crackdowns and is striving to achieve compliance in order to take the digital sector to the next level,” he added.

Watch: What are the risks of investing in cryptocurrency?