As Mainstream supporters of Bitcoin continue to show their support, banking giant JP Morgan has today provided their analysis of the popular cryptocurrency, with a statement that compares Bitcoin to an economic side-show.
Daniel Pinto, co-president of JP Morgan Chase & Co, seemed to previously acknowledge the bank would find itself inevitably tied to Bitcoin in the future:
“If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved. The demand isn’t there yet, but I’m sure it will be at some point.”
However, the New York- based multinational has today reverted to their previous skepticism with regards to cryptocurrencies, as Reuters reports:
“Bitcoin is an economic side-show”
This comment by analysts at the bank is representative of the cautious stance that JP Morgan has so far taken on the currency, with their most recent assessment of Bitcoin concluding that cryptocurrency is a poor hedge against a decline in equity prices.
“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,”
This is in line with the conservative view that JP Morgan has historically taken with regards to Bitcoin. In 2017 CEO Jamie Dimon famously branded Bitcoin “a fraud” and “worse than tulip bulbs” threatening to fire his employees if they were caught trading Bitcoin on company accounts
Nonetheless, with big players such as Morgan Stanley, and Deutsche Bank entering the space, JP Morgan’s most recent comments contrast starkly with the overwhelmingly positive sentiment that has surrounded Bitcoin in recent weeks.
The shift in attitude by banks in recent months, does not completely eliminate contrasting views within their organisation, as JP Morgan’s comments have suggested. The bank’s contrasting views, which have seen it both actively warn against Bitcoin, and also comment on its inevitability in the future, shows the still divisive nature of the currency in the traditional finance sector.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.