The bank warns the dollar’s dominance is coming to an end, and to prepare accordingly. Now, more than ever before, investors are looking at how to diversify and store value. In terms of Incent’s success, we have intentionally built a suite of tools that is applicable to any sector or global market.

Disclaimer: this article does not constitute trading or investment advice. Nothing in this article should be taken as a recommendation to buy or sell one or other asset or class of assets.

JP Morgan has urged its international high net-worth clients to reduce their exposure to the dollar in favour of gold and other international currencies. 

The bank’s FX, Commodities and Rates Strategist, made his recommendations in a report titled, Is the dollar’s “exorbitant privilege” coming to an end? Noting that the portfolios of its high net-worth clients are exposed to the dollar to the tune of around 80%, Craig Cohen asks: The U.S. dollar could lose its status as the world’s dominant currency. How does this affect investors?

‘The U.S. dollar (USD) has been the world’s dominant reserve currency for almost a century. As such, many investors today, even outside the United States, have built and become comfortable with sizable USD overweights in their portfolios. However, we believe the dollar could lose its status as the world’s dominant currency (which could see it depreciate over the medium term)... diversifying dollar exposure by placing a higher weighting on other currencies in developed markets and in Asia, as well as precious metals makes sense today.’

Cohen suggests cutting that exposure by up to half, down to just 40%, replacing it with gold, Chinese renminbi, euros, Swiss franc and even the British pound.

Gold, bitcoin and crypto

What the report does not do, in any form, is endorse cryptocurrency as an alternative investment class. That’s not surprising. Jamie Dimon, JP Morgan’s CEO, has been a vocal critic of bitcoin. Nonetheless, the report was picked up by many in the crypto space – notably bitcoin permabull Max Keiser. Again, this is hardly surprising: the investment banking giant is warning that the days of dollar hegemony may be coming to an end. That has been a theme within the Bitcoin community for as long as it has existed – and now JP Morgan, a mainstay of American prosperity, is saying it.

Incent and the ‘shifting centre’

The take-home point for the crypto world is that the bank’s warning that the world’s ‘economic center’ is shifting away from the US, back towards China (when it has lain for centuries). Cohen argues for thoughtful diversification, including into gold – the traditional safe haven asset, which is not tied to the performance of any single country or economy. It’s no coincidence that gold has just hit $1,500 per oz for the first time since 2013.

For the crypto world, the same safe haven asset is bitcoin, digital gold. Incent is slightly different. If (digital) gold is a commodity, Incent is intended to be used as a global transactional currency as well as a store of value. The idea is that it should ultimately reflect a very broad range of economic activity, across multiple sectors, and all around the world. It’s a currency of commerce, of payment for any activity, online or offline, that users want to incentivise.

Consider that a crypto like BAT is designed for online advertising – a huge market, certainly, but a specific one. Or that BNB is a kind of proxy for the health of the crypto trading sector – another large and growing market, but just one market.

Incent has spent the last two years building tools that allow any business, or any organisation, to integrate seamless distribution of rewards into their models. It’s broad-based, applicable to any sector (including those targeted by BAT and BNB), highly scalable, easily bridges the crypto and fiat worlds, and suited to both online and offline activities. Thanks to that approach, we’re seeing interest from a diverse range of businesses and individuals.

Rather than a shifting centre, we see the opportunity in the de-centring process we see occurring. In a world of retrenching governments and protectionism, there is a counter-movement towards decentralisation, diversification and deliberately global strategy.

With the launch of the platform, Australian users can access rewards in Incent tokens on every spend they make. To find out more, visit www.incent.com.  

• Incent Slack: https://incentinvites.herokuapp.com/ 

• Incent Telegram: https://t.me/IncentLoyalty 

• Buy and sell INCNT tokens on Bittrex.

This is a general illustration only and does not constitute any financial advice under any circumstances.