The embossed word Bitcoin sits on the edge of Bitcoins stacked in this arranged photograph in Danbury, U.K. (Photographer: Chris Ratcliffe/Bloomberg)

JPMorgan's `Gandalf' Kolanovic Joins Boss in Bashing Bitcoin

(Bloomberg) -- Well, it ain’t Jamie Dimon, but there’s another heavy hitter at JPMorgan Chase & Co. who isn’t a fan of cryptocurrencies.

Global Head of Quantitative and Derivatives Strategy Marko Kolanovic (also known as "Gandalf" and "Half-Man, Half-God") echoed many of his boss’ warnings about digital currencies in an assessment of the asset class on Wednesday.

Bitcoin is down roughly 8 percent since being called a "fraud" by Dimon on Tuesday afternoon.

"Cryptocurrencies cannot be reliably valued and they have significant ‘tail risk’ that could come in the form of a regulatory ban," writes Kolanovic. "Moreover, the whole cryptocurrency market exhibits some parallels to fraudulent pyramid schemes."

It’s likely that other governments will follow in China’s footsteps and crack down on digital currencies, he added.

"While we don’t know whether the price of cryptocurrencies will go up or down in the near-term, the history of currencies, governments and financial fraud tells us that the future for cryptocurrencies will likely not be bright," according to the strategist.

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