Bitcoin may be all the rage, but at JPMorgan Chase & Co. (JPM - Get Report) , it comes with a high risk: Employees caught trading in the popular cryptocurrency forfeit their jobs.

"We'll fire them in a second, for two reasons: It's against our rules, and they're stupid, and both are dangerous," CEO Jamie Dimon said Tuesday, Sept. 12, at a Barclays conference in New York -- the first of two forums where he detailed flaws with cryptocurrencies. "Honestly, I'm just shocked that anyone can't see it for what it is."

Only about a decade old and trading at about $3,900, Bitcoin is created when networked computers record and validate transactions in a secure shared ledger known as blockchain, which is accessible around the world. Trading in the cryptocurrency and its rivals by banks and exchanges in China was banned last week, with regulators citing disruption "to the economic and financial order." 

The U.S. Securities and Exchange Commission, meanwhile, is currently evaluating whether to allow trading in a Bitcoin trust that authorities initially rejected.

"You can't have a business where people can invent a currency out of thin air and think that people who are buying it are really smart," Dimon said. "It won't end well."

Right now, governments -- which have, since ancient times, created currencies that they can control and monitor -- look at cryptocurrencies as a novelty. 

But "wait until someone gets hurt, or someone uses it for illicit purposes, -- and they're using it for some illicit purposes right now -- they'll shut it down," Dimon said at the Delivering Alpha conference later in the day. Payment in Bitcoin, for instance, is frequently demanded by hackers before they'll restore access to a computer system they have broken into and shut down.

Another challenge facing cryptocurrencies, Dimon said, is "what you just saw in China. Governments like to control their money supply. The first thing a nation does when it forms itself, literally the first, is forming currency."

Such challenges are taking a toll. Bitcoin has lost 25% of its value in U.S. dollars in September, according to Coindesk -- after a four-fold expansion over the prior 11 months.

While cryptocurrencies may retain value in rogue nations like North Korea or on black markets as payment for illegal activities, Dimon doesn't expect the surge in developed economies to last.

It's a situation similar to the speculation in tulip prices in the Netherlands during the 17th century, he said. One of the early bubbles studied by economists, it's getting heightened attention now because of its exploration in Paramount's "Tulip Fever," which opened in U.S. movie theaters this month.

When the run-up in tulip prices -- which became so frantic that some of the Dutch bought options using their homes as collateral -- collapsed in 1637, many investors were ruined, according to the Rijksmuseum, the national museum of the Netherlands.

Cryptocurrencies are "worse than tulip bulbs," Dimon said.  "It's just not a real thing. Eventually, it will be the emperor with no clothes.'"

Updated from 3:57 p.m. on Tuesday, Sept. 12.

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