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Bitcoin slides on 'fraud' warning from JPMorgan's Dimon

Bitcoin slides on 'fraud' warning from JPMorgan's Dimon
From Reuters - September 13, 2017

LONDON (Reuters) - Bitcoin slid by more than 10 percent on Wednesday, as investors sold the cryptocurrency after a warning by JPMorgan (JPM.N) Chief Executive Jamie Dimon that it is a fraud and will eventually blow up.

Bitcoin, the original and still the biggest cryptocurrency, has been on a tear in recent months, hitting a record high just below $5,000 at the start of September after a more than fivefold increase in price since the start of the year.

But bitcoin and other cryptocurrencies have been falling since early last week, when China banned the issuance of new digital coins for fundraising purposes - a phenomenon known as initial coin offerings, or ICOs.

ICOs have fueled a rapid ascent in the value of all cryptocurrencies, from about $17 billion at the start of the year - with bitcoin making up around 90 percent of that - to a record high close to $180 billion at the beginning of September, of which bitcoin represented less than half.

Following the ICO ban, the market was further spooked by reports early this week that Chinese authorities were planning to forbid any trading of cryptocurrencies and by a warning on ICOs from Britains financial watchdog, raising fears of a wider crackdown.

Dimons warning triggered a further 11 percent collapse in the price of bitcoin, which had already lost around 15 percent of its value in 10 days.

He joins a long line of market commentators that have been critical of bitcoin and it potentially being in a bubble, so his comments could have been the tipping point, said James Butterfill, head of research and investment strategy at ETF Securities in London.

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