Bitcoin is a ‘hyped-up fraud’, says JP Morgan chief

The billionaire chairman of JP Morgan, Jamie Dimon, has called Bitcoin a “hyped-up fraud” and the financial equivalent of a “pet rock” as financial chiefs turn against digital currencies.

Mr Dimon called cryptocurrencies a “waste of time” in comments at the World Economic Forum in Davos.

However, he said the technology behind Bitcoin, known as a blockchain, could have uses. This kind of digital ledger is designed to be difficult to alter or hack and enables the creation of a public record of transactions.

He said: “Blockchain is a ledger system that we use to move information… to move money. It’s a technology we think will be deployable.”

Speaking to CNBC, Mr Dimon added he could envisage the US Federal Reserve raising interest rates above 5pc as central bankers grappled to get a hold of raging inflation.

Mr Dimon said: “I actually think rates are probably going to go higher than 5pc. There’s a lot of underlying inflation, which won’t go away so quick.”

The US Federal Reserve has predicted rates will rise from around 4.5pc to about 5pc by the end of the year, and remain there.

Mr Dimon’s comments on Bitcoin come as financial institutions emerge red faced from the failure of FTX, the world’s second largest cryptocurrency exchange, which collapsed amid allegations of fraud.

Financial giants including Blackrock and venture capital fund Sequoia had invested in the digital currency exchange, founded by Sam Bankman-Fried.

Mr Bankman-Fried has been arrested and accused of “massive” fraud by US authorities. He is alleged to have siphoned customer money to pay for luxury properties and to prop up losses at a crypto hedge fund. He has pleaded not guilty.

Last year, the price of Bitcoin plunged by more than 60pc amid a sell-off of cryptocurrencies accelerated by a series of scandals and collapses throughout the digital asset industry.

However, so far in 2023 the price of the digital currency has recovered. One Bitcoin is now worth £16,880, up 23pc since the start of January.