JPMorgan Turns Bullish as Bitcoin Hits US$10,000

When it comes to bitcoin critics, there are plenty of names to choose from.

From investing gurus, to politicians and even tech entrepreneurs, bitcoin has made plenty of enemies. However, one of the most vocal has always been JPMorgan CEO Jamie Dimon.

In 2014 he said ‘Bitcoin is a terrible store of value.

In 2015 he said ‘Bitcoin will not survive.

2016: ‘Bitcoin is going nowhere.

2017: ‘Bitcoin is a fraud.’

2018: ‘I don’t really give a s#*t about bitcoin.

You get the picture…

The man had a lot to say about bitcoin, but never anything positive.

Well, recently it appears Jamie Dimon has turned the other cheek.

Earlier this month his firm finally took the plunge into the crypto world. Agreeing to provide banking services to both Coinbase and Gemini. Two of the largest cryptocurrency exchanges in the world.

It is quite the turn of events, as is their timing.

Steady climber – Bitcoin Price is Up

Overnight, for the first time in almost a month, bitcoin hit the US$10,000 mark again.

The milestone came from a huge spike in price overnight, with some pointing to the unrest in the US as a reason.

Short-term, this could certainly be the case. Long term though, the fundamentals of bitcoin will rely on supply and demand. The latter of which can and will be influenced by the likes of JPMorgan.

Make no mistake, having investment banks siding with crypto exchanges in a big deal. Especially in the wake of the recent bitcoin ‘halvening’. You can read all about that, right here.

However, that doesn’t mean they’re all on board just yet either.

Unlike the recently reformed JPMorgan, Goldman Sachs is sticking to their guns.

In a private call to clients, the firm unveiled their ‘US Economic Outlook & Implications of Current Policies for Inflation, Gold and Bitcoin’. A fancy title for what was inevitably a simple conclusion:

Cryptocurrencies Including Bitcoin Are Not an Asset Class’.

Suffice to say, they are not fans. In fact, they sounded a lot like Jamie Dimon did back in 2014…

Whether time will change their view, we can’t say. But in the meantime, bitcoin keeps mounting its comeback.

Big money, big future

We can’t say we’re surprised by JPMorgan’s recent pivot to bitcoin. After all, institutional demand for crypto is growing rapidly.

For example, Grayscale Investments —a digital asset manager— holds roughly US$3.7 billion in a variety of assets including crypto. And they’ve been accumulating bitcoin at an extraordinary rate. Nearly 1.5 times the rate that new coins are being mined.

They’re not the only ones either. Several other hedge funds recently spoke told Cointelegraph about the strong demand they’re seeing. As Blockforce Capital CEO, Eric Ervin put it:

We are seeing more institutional interest. I think this would be true regardless of the halving or the QE taking place, even more so given the unprecedented fiscal and monetary global stimulus.

In other words, people are hedging their bets with bitcoin and crypto. Using this emerging asset class (even if Goldman disagrees) to offset risk in other sectors.

Indeed, it’s a concern that all investors should think about. When it comes to investing, having some form of wealth outside of the fiat system may be the smartest decision one could make. And while gold has long been one of the best ways to do that, bitcoin now offers a more modern solution.

That’s why our resident crypto expert, Sam Volkering, is sharing an excerpt from his crypto manifesto for free. A section that explains in extreme detail how bitcoin operates outside of the typical financial world. You can read all about it, right here.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

Correction: Grayscale Investments is a digital asset management firm, not a hedge fund. The article has been updated to reflect the change.


Ryan Clarkson-Ledward is one of Money Morning’s analysts.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities.

You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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