JP Morgan: Bitcoin Could Continue as a Speculative Asset

By Abhimanyu Krishnan | News | 15 Jun 2020

JP Morgan Chase analysts have told clients in a note delivered on June 11 that they see Bitcoin (BTC) continuing its existence as an asset, albeit a speculative one. Obtained by CoinDesk, the note makes some interesting conclusions by the analysts, who noted that Bitcoin outperformed other asset classes in March and possessed more resilient liquidity on major exchanges.

A large part of the note was dedicated to the performance of asset classes in March, when markets crashed due to the COVID-19 pandemic. The cryptocurrency asset tanked alongside other asset classes - a point that the analysts highlight by saying that Bitcoin has seen an increase in correlation with stock markets, something that wasn’t as prominent in years before.

But perhaps of biggest note is the statement that cryptocurrencies “ successfully passed their first stress test” - a view which echoes the sentiment put forward by Bloomberg analysts in April 2020, who said that Bitcoin was experiencing a leap in maturation and had potential as a store of value.

However, JP Morgan’s analysts seem to think differently on the Bitcoin as as a store-of-value, saying that there is little evidence that it was strong in this regard and that it is more “likely a vehicle for speculation”,

There is little evidence that bitcoin and others served as a safe haven (i.e., ‘digital gold’)—rather, its value appears to have been highly correlated with risky assets like equities. This all likely points to the continued survival of the asset class, but likely still more as a vehicle for speculation than as a medium of exchange or store of value.

Other JP Morgan have reportedly expressed doubt about Bitcoin, but that hasn’t stopped JP Morgan Chase from working firms in the space. The Wall Street Journal reported in May 2020 that the investment bank would offer banking services to both Coinbase and Gemini.

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Abhimanyu Krishnan
Abhimanyu Krishnan

Technophile, cryptocurrency enthusiast and journalist.


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