JP Morgan Chase, one of the world’s largest financial institutions, prefers Bitcoin and other cryptocurrencies as alternative investment assets.
They consider the recent terra system incident a good indicator of better days to come. Since most investors are selling off their stake in cryptocurrency, we might getting nearer an ideal time to buy.
As the sell-off reaches its peak, there is room for the crypto rebound, which investment companies should capitalise on. JP Morgan strategists are contemplating replacing their real estate portfolio with digital assets. In financial circles, alternative assets are not part of the classic portfolios such as stocks and bonds. They derive their utility from their intrinsic value, just like private debt, real estate and private equity.
Long Term Research on Cryptocurrency
A recent study by JP Morgan Chase showed that Bitcoin’s price is 28% higher than its current price. Bitcoin’s value should be $38,000 compared to the current price of $29,722, which was Bitcoin’s value on the market as of 25th May 2022. It means that investment in Bitcoin is a worthy venture as good dividends are certain once the market roars back to life.
Generally, cryptocurrencies have taken a hit in 2022 due to rising inflation and the resultant interest rate. The war in Ukraine and China’s slowdown are other factors eating into the Cryptocurrency market. JP Morgan Chase wants to employ the “underweight” strategy and invest in cryptocurrency. As they grow back into their previous ranking, the marginal benefit JP Morgan will accrue is worth waiting.
Nikolaos Panigirtzoglou, one of the Lead JP Morgan Chase researchers, believes that the crypto value decrease is a business process. Once the market auto-corrects, investors will witness Bitcoin’s upside and other cryptocurrencies. Although the venture is still risky, market forces can bring it back to the equilibrium price.
Bitcoin lost approximately 37% of its value in 2022, while Ethereum went down by 48%. This reduced the total cryptocurrency valuation from $3 trillion to $1.3 in May 2022. The difference created more room for new investments, which will create a rebound and back to profitability. It provides a new opportunity for JP Morgan to replace real estate with cryptocurrency, along with the hedge funds.
Reasons Why We Should Not Take this Advice for Granted
The collapse of Luna might have caused a haemorrhage in the digital coin market, but it gave other cryptos the chance to improve their case. Markets are dynamic and move with demand over time. JP Morgan Chase’s analysis proves that the buy-outs devalued most cryptos, but they have reached the base. The only way cryptocurrencies can go is up, with those investing now set to benefit from the upside trend.
G7 countries are embracing these digital coins, which makes their existence valuable. France gave Binance the approval to trade cryptocurrency within its borders, while Brazilian companies accept cryptocurrency as a form of payment. As a renowned financial institution globally, JP Morgan Chase’s assertion is a strong indicator of cryptocurrencies’ growth proponents.
Forecasts and Intended Investments in Cryptocurrency
More companies continue to invest and support digital coins, assuring investors and users of stability in the face of the financial crisis. In April, BlockApps raised over $41 million for their Serie A funding. The amount is part of the $70 million funding, which the company used to expand their associate program and acquire more assets for their enterprise blockchain platform.
As countries continue to come up with cryptocurrency legislations, digital coins will increasingly become popular, leading to more investments and growth. Albania is the latest country in the world to join the legislation caravan, hoping to capitalise on its growth for tax benefits. Other countries like El Salvador and the Central African Republic have ratified their financial laws to enact Bitcoin as a form of currency. They use it as a stop-gap measure to boost their dwindling economic fortunes.
However, cryptocurrencies are not out of the woods yet. They still have to be content with strict regulations and controlled working environments. With international institutions such as European Central Bank (ECB) issuing precautionary warnings to their member countries, cryptocurrency investments will slow down. Trading will resume only after the current recession and inflation subside.
Crypto Lists will follow the conversation and bring an extended analysis of crypto investments and their effect on traditional financial institutions.