The Bradford-born performer, whose real name is Steven Frayne, said the rumour started after he began doing his first stunt, taught to him by his grandfather to help him deal with bullies.
It involved asking a person to lift his slight frame off the ground, then using their own weight to prevent them from being able to do it, the 31-year-old revealed in a national newspaper interview yesterday.
“They started spreading rumours that I was a demon child, so it worked in a way, it got people to leave me alone,” he told The Sunday Times. “But it also scared people away from me and made me a bit of a loner.”
Dynamo has built up a huge following using social media and counts David Beckham, Will Smith, Jay Z and Sir Paul McCartney among his fans.
He grew up on a tough housing estate in Bradford, and has previously spoken about how as a thin, sickly child he was targeted by bullies.
His hit TV series, Dynamo: Magician Impossible, has featured appearances by Hollywood stars Samuel L Jackson, as well as Sheffield-born Olympian Jessica Ennis-Hill.
Dynamo, who announced in 2011 that he had become a member of the Magic Circle, released an autobiography, called Nothing is Impossible, in August last year.