In an unexpected twist, today’s Litecoin news revolves around Jamie Dimon, CEO of JPMorgan Chase & Co. (NYSE:JPM), and an obscure Chinese think tank called China’s National Internet Finance Association (NIFA).
Let’s start with Wall Street’s poster boy.
While speaking at a conference in New York, Dimon claimed that Bitcoin “is a fraud” and will blow up before long. “It’s worse than tulip bulbs,” he said, in reference to the famous asset bubble from the 1600s.
Dimon claimed that there would be significant losses for anyone “stupid” enough to trade cryptocurrencies. (Source: “JAMIE DIMON: Bitcoin is a fraud that’s ‘worse than tulip bulbs’,” Business Insider, September 12, 2017.)
However, he spent less time talking about JPMorgan’s own investments in blockchain technology.
Along with its banking peers, JPMorgan has poured billions into the development of an enterprise blockchain, hoping to front run interest in public ones, such as those operated by Bitcoin and Litecoin.
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Meanwhile, fear of a Chinese crackdown on cryptocurrency exchanges worsened when NIFA issued a report on its legal standing. (Source: “Bitcoin Exchanges Lack Legal Foundation, China Internet Finance Association Says,” CoinDesk, September 13, 2017.)
According to the think tank, “Any trading platform for any kind of so-called ‘coin’ has no legal base of foundation in China.” (Emphasis added.)
Some minor exchanges are already fleeing the market citing regulatory concerns, though the major ones (Huobi, OKCoin.cn, BTCC) are waiting for an official ruling from Beijing.
As you can imagine, this avalanche of bearish news buried our Litecoin price forecast in pessimism.
Litecoin to USD prices fell roughly 6.48% to near $57.84, marking the first time the currency has been below $60.00 since late in August. The Litecoin to Bitcoin exchange rate also fell around 3.29%.
Jamie Dimon has an unnatural ability to command media attention and the attention of his peers, but I would take his comments with a “Toyota”-sized grain of salt.
Not only are the big banks working on their own blockchain, but Bitcoin and Litecoin are designed to disrupt the banks. It’s possible he regards them as an existential threat.
However, the China crackdown is now looking very real.
Considering that Litecoin draws huge trading volumes from within the Middle Kingdom, it’s almost certain that the downside risk has extended considerably in the last few days.