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JPMorgan “Long term potential of Bitcoin is considerable”

Photo of: Nathan VDH
by Nathan VDH

To say the least, JPMorgan, the $316 billion investment banking giant, has made a big move on its position in Bitcoin. Indeed, the financial institution recently indicated, according to Cointelegraph, that “the long-term upside potential of Bitcoin (BTC) was considerable”.

This is significant news for Bitcoin’s legitimacy, coming days after PayPal stated that it would soon allow its 346 million users to buy, sell, and keep (but not withdraw) Bitcoin and other cryptocurrencies.

“Bitcoin’s long-term growth potential is significant if it competes more intensely with gold as an “alternative” currency, as millenials would become a more significant component of the investor universe over time”.

The JPMorgan paper essentially highlights three major reasons for Bitcoin’s long-term growth potential:

First, the price of Bitcoin must be increased tenfold to match private sector investment in gold. Second, cryptocurrencies are very useful and will continue to be in the economy of the future. Third, Bitcoin may appeal to billionaires in the longer term.

JPMorgan analysts said : “Technically, Bitcoin’s market capitalization would have to increase 10-fold from there to match the total private sector investment in gold via ETFs or bars and coins”.

It’s amazing how the bank changed its mind. Remember, just three years ago, Jamie Dimon, the managing director of JPMorgan Chase & CoBitcoin said that Bitcoin was “a fraud that is going to explode”.

Not very crypto-friendly. But over the months since his CEO’s punchy statement, JPMorgan had mellowed and declared in May 2019 that Bitcoin, at long last, had “intrinsic value”. A year later, the bank accepted Gemini and Coinbase as customers.

So today, JPMorgan looks Bitcoin in the eye with a certain desire and sees enormous potential in the king of cryptocurrencies. JPMorgan is not the first hedge fund or institutional investors to look to Bitcoin in a better light. Earlier this month, big companies such as Square invested strongly in Bitcoin while we expect the highest yearly close since 2017.