It was just recently when JPMorgan talked about the current situation and the potential of cryptocurrencies as hedge funds. The major financial firm from the United States stated that cryptocurrencies are one of the poorest hedges when it comes to equities facing major drawdowns.
The cryptocurrency industry also comes with a wide variety of benefits that are highly questionable. Despite all the concerns and factors going into play for cryptocurrencies, JPMorgan has given a piece of advice that is very surprising.
The firm has suggested that all major investors should still invest at least 1% of their portfolio into the acquisition of cryptocurrencies. This goes onto prove that although the firm recognizes the nature of the platform, yet it admits the potential of cryptocurrencies.
The firm has stated that although the firms do not spend much on cryptocurrencies, they can still benefit from the gains that the crypto-industry gathers every now and then.
By investing even a fraction of the portfolios, the investment giants can gain huge returns from the surge in prices of cryptocurrencies.
When talking about cryptocurrencies, JPMorgan Chase specifically mentioned Bitcoin (BTC) and its potential in the crypto-market. There was a time when JPMorgan was bearish about BTC and other digital assets, but the firm took a U-Turn at the end of the year 2020.
It was towards the end of 2020 when JPMorgan Chase started talking positively about Bitcoin (BTC). The firm also talked about the role it has played in boosting the overall presence, popularity, adoption, and trading volumes in the crypto-verse.
Although BTC has experienced two plunges with respect to the price in the running year, it is still expected that BTC will manage to gain all-time highs soon. In the first instance, it was on January 10, 2021, when BTC experienced the first plunge of the year.
Afterward, BTC prices surged and it again went all the way up to hitting all-time highs at the beginning of February 2021. However, BTC has again experienced a plunge from February 22, 2021, and is still trying to regain its former glory.
In the light of the above, JPMorgan has advised all the major investors to invest at least 1% of their portfolio in Bitcoin (BTC). The company has advised all investors to add BTC to the list of multi-asset portfolios.
This suggestion was given by the Vice President of JPMorgan “Amy Ho” and Global Head of Research at JPMorgan “Joyce Chang”.
However, the higher-ups from JPMorgan have clarified one thing in their note that they sent to the clients. The executives stated that the cryptocurrency assets should not be perceived as funding currencies but investment currencies.