Bitcoin continues to be the most talked-about crypto asset by many and all affiliated with the cryptocurrency market. The rising fortunes of the assets have also coincided with the growing institutional and wide stream adoption of the assets by all. Several traditional financial services firms like banks and many FinTech organizations have also begun to embrace Bitcoin and many cryptocurrency assets.
However, a few analysts from JP Morgan Chase, one of the world’s largest financial services firms, in a recent interview, have come out to discuss the fortunes of the cryptocurrency, believing that its volatility will likely be a reason why it will never replace equities.
JP Morgan analysts make a U-turn on their Bitcoin stance
JP Morgan analysts are not the first to discuss the unstable nature of the cryptocurrency is a debilitating factor behind its longevity as an asset. However, what is shocking is that JP Morgan has been touting around the idea of providing Bitcoin custody services for their institutional clients, as institutional demand for the digital asset continues to be on the rise.
However, the firm is yet to publicly decide whether to offer crypto services yet, despite its customers’ growing interest. A few of the bank’s strategists in a meeting some weeks back have discussed the cryptocurrency fortunes, believing it to be replacing traditional assets like Gold. Bitcoin’s general belief is that its plummeting value has now placed the assets above Gold both in demand and value.
However, the analyst’s recent discussion has centered around Bitcoin replacing equities, which the analyst believes will likely be impossible as the medium risk nature of equities makes it a worthwhile asset. Bitcoin is a high-risk asset that can bring in rewards and losses in split seconds, an attribute that is not associated with the nature of equities.
JP Morgan Analysts believe that Bitcoin is in a bubble state
JP Morgan analysts have now joined a few other Bitcoin critics like Deutsche Bank, who believes that the digital asset’s uprising fortunes are a bubble that would soon clear off. This is not the first time that Bitcoin is facing such criticism, as the assets which have recently crossed the $1 trillion market capitalization have been subject to criticism in the past from several top investment experts.
JP Morgan analysts believe that the institutional investment of Bitcoin is not enough to stop the assets from a downward spiral in prices soon, as they believe that this phase will not last. Contrary to the analysts’ opinion, Crypto analysts believe that if large corporations like Tesla continue to invest in Bitcoin, the cryptocurrency’s fortunes will continue to plummet. However, recent events like Elon Musk moving the market prices by flirting with Bitcoin shows that institutional adoption is not the only factor attributed to price growth. This sentiment disagrees with the JP Morgan analysts.