Bitcoin tanks 11.5% since Jamie Dimon called it 'a fraud'
The cryptocurrency was down over 9% Wednesday morning at $3,767 a coin, just eleven days after crossing the much-anticipated $5,000 threshold.
Bitcoin has fallen more than 11% since Jamie Dimon, the CEO of JPMorgan, bashed the cryptocurrency.
On Tuesday, the 61-year-old banker said at the Barclays Financial Services Conference that bitcoin was "a fraud" that would eventually blow up. Dimon, a long-time critic of bitcoin, once called it "a terrible store of value" in 2014 during an interview with CNBC.
John Spallanzani, chief macro strategist at CFI Group, tells Business Insider that Dimon's remarks, however, aren't the only reason bitcoin is under pressure this morning.
"The negative news cycle continues, the UK regulator FCA has sounded the alarm over initial coin offerings, and the China crack down," he said in an email to Business Insider.
On Tuesday, the UK's financial watchdog, the Financial Conduct Authority, warned investors about the risk associated with initial coin offerings, the cryptocurrency-based fundraising method. Over $2.1 billion have been raised via the method since the beginning of the year, according to Autonomous NEXT, the financial technology analytics provider. Some companies have raised millions of dollars in a matter of hours without having an actual product. Here's the FCA (emphasis ours):
"ICOs are very high-risk, speculative investments. You should be conscious of the risks involved (highlighted below) and fully research the specific project if you are thinking about buying digital tokens. You should only invest in an ICO project if you are an experienced investor, confident in the quality of the ICO project itself (e.g. business plan, technology, people involved) and prepared to lose your entire stake."
Earlier this month, China announced it was banning initial coin offerings. And more recently, rumors have escalated that China might ban cryptocurrency trading altogether. A Caixin report out September 8 suggested the China will shut down domestic cryptocurrency exchanges.
Two of China's largest bitcoin exchanges, Okcoin and Huobi, say they haven't received any such notices, according to a tweet from Bloomberg's Lulu Yilun Chen.
In February, China blocked customers from withdrawing their bitcoin. They were eventually allowed to resume withdrawals in June.
Get the latest Bitcoin price here.