JPMorgan’s global head of quantitative strategy has joined his boss, CEO Jamie Dimon, in the growing legion of anti-cryptocurrency crusaders.
In a client note on Wednesday, Marko Kolanovic said that cryptocurrencies as a whole have “some parallels to fraudulent pyramid schemes.” The comments come a day after Dimon called bitcoin a “fraud” that “worse than tulip bulbs.” He even went as far as to say he’d fire any trader that transacted it for being stupid.
Kolanovic highlighted bitcoin in his comparison, noting that while the initial mining of coins requires minimal effort for a disproportionally large share of profits, there are diminishing returns in the future, until the gig is up. This same dynamic is at the core of a pyramid scheme, he said.
But Kolanovic’s analogy doesn’t end there. He also said that one way to circumvent this potential dead end is to simply create a new cryptocurrency altogether. This would be akin to the new blockchain-based instruments popping up all the time — with red-hot ethereum being the most successful example.
“While we don’t know whether the price of cryptocurrencies will go up or down in the near-term, the history …read more
Source:: Businessinsider – Finance