Value-Of-Cryptoassets-Is-Unproven-Says-Analysts-At-JPMorgan

JPMorgan Secretly Loves Crypto, Here’s Why We Think So

JPMorgan, a New York-based International investment was founded in 2000 by a conglomeration of several big financial organizations. With Jamie Dimon as its current CEO not only is it the largest bank in the US, it is also the second most valuable bank by market capitalization in the world. This establishment has for years expressed interest in blockchain industry and has been at the forefront of the issue of using blockchain and cryptocurrency. So much so, that last year they became a part of the Ethereum Ethereum Alliance. At the beginning of 2018, the organization also published the “Bitcoin Bible” which explains the technology on which cryptocurrency is based, revealing both its strengths and its weaknesses.

Analysts employed by the bank which now manages $2.6 trillion in total assets are of the opinion that the value of cryptoassets is unproven and its underlying blockchain technology will not be of any help in order to improve traditional banking processes for at least the upcoming few years. Research conducted by JPMorgan’s market analysts reveals that digital assets like will have value only if investors throughout the world lost confidence and faith in more established forms of investments or assets.

The researchers believe cryptoassets will be of use and will make sense, only in a “dystopian scenario” where investors have lost faith in the US dollar, other such fiat currency, and gold.

But it then countered that argument by saying

“Even in extreme scenarios such as a recession or financial crises, there are more liquid and less-complicated instruments for transacting, investing and hedging.”

However, it might be noted that till date Pension funds and asset managers have mostly steered clear of cryptoassets, in spite of advances in custodial services that would ensure the availability of safer methods of storing digital money. The report cites concerns about volatility, security flaws and propensity for illicit usage as one reason for staying clear. Additionally, the use of cryptocurrencies, in lieu of payments with more traditional means, which is the intended purpose of bitcoin will remain “challenged.”

Therefore, the analysts also concluded that if Bitcoin’s bear market, which has been going on for quite some time now persist, it could drop as low as $1,260.

The fact that JPMorgan is in the news for cryptocurrency related news, with their stance often time contradictory says a lot about the impact that digital assets is having on similar multinational companies.