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Bitcoin drops 8% after JPMorgan's Jamie Dimon calls it a fraud

Key Points
  • Investors are also jittery because Chinese regulators are threatening to crack down on some exchanges.
  • Bitcoin price fell below $4,000 on Wednesday.
Bitcoin price falls below $4,000 on worries about China crackdown

fell below $4,000 on Wednesday with negative comments from a major business leader about the cryptocurrency and the threat of a regulatory crackdown, unnerving investors.

The digital currency dropped as low as $3,766.36 on Wednesday and traded down 8.7 percent at $3,792.43 as of 11:03 a.m. in New York, according to data from industry website CoinDesk.

The move lower came a day after JPMorgan Chase CEO Jamie Dimon called the cryptocurrency a "fraud," adding that "Someone is going to get killed."

"It's worse than tulip bulbs. It won't end well. Someone is going to get killed," Dimon said at a banking industry conference organized by Barclays. "Currencies have legal support. It will blow up."

Here's what traders made of Jamie Dimon's bitcoin comments

At its lowest point on Wednesday, bitcoin was nearly $1,250 off the all-time high of 5,013.91 hit on Sept. 2. Bitcoin's total market capitalization or value has fallen by more than $15.5 billion in this time, from $82.28 billion on Sept. 2 to $66.74 billion on Wednesday, according to CoinMarketCap data.

Investors have also been jittery in the past few days mainly because of numerous media reports suggesting that Chinese authorities are . These are platforms where bitcoin is traded.

Another report by news outlet said Chinese authorities were looking to ban projects that looked to raise money through cryptocurrencies. These so-called initial coin offerings have exploded in recent months.

It's not just Chinese regulators taking a closer look at bitcoin. On Wednesday, India's central bank said it had been looking into cryptocurrencies as legal tender. However, Sudarshan Sen, an executive director at the Reserve Bank of India, said the institution was "not comfortable" with non-fiat cryptocurrencies, in comments reported by Reuters.

— CNBC's Fred Imbert contributed to this report.

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