JPMorgan Has Told Several Clients How Bitcoin Could Be Helpful
Tyler - Cryptocurrency Broker
JPMorgan allegedly privately advised some of its investors to buy Bitcoin (BTC) as a portfolio diversifier, adding that the asset might be useful if it was sized appropriately.
As per Wolfie Zhao's article for The Block, JPMorgan Private Bank has provided an informative slide deck to clients of its wealth management program to help them better appreciate the dangers and benefits of buying Bitcoin and other crypto assets. The deck that The Block was able to access a copy of addresses the mechanics of Bitcoin in addition to the ramifications of creating a crypto market investment portfolio.
Despite the inclusion of crypto properties, the deck continues to be for "informational purposes only" and states how J.P. Morgan Securities LLC doesn’t currently “endorse, advise on, transmit, sell or transact in any type of virtual currency."
A slide titled "How others are valuing crypto?" Detailed three standard indicators used by market observers, though indicating major payoff from Bitcoin is conceivable. The document also says that it uses Metcalfe's law—a value of a network equal to the square number of its users—to calculate the value of Bitcoin per coin at $21,667.
The developers of the Deck argued against treating Bitcoin as a safe haven currency on par with gold, at least for now they state how the digital currency is not the same as the valuable metal, gold, and do not view as such. But in terms of creating a diverse portfolio for investments they go on to say how Bitcoin’s “volatility characteristics and correlation profile refute the comparison to the traditional safe haven asset."
The Deck summarizes that Bitcoin trading will expand an investment portfolio but should not be seen as a security asset, stating that “Bitcoin doesn’t consistently trade like a protection asset or a substitute for gold.” However, the Deck continues on by saying how Bitcoin is a “diversifying risky asset rather than protection akin to Treasuries and gold."