JP Morgan Analyst: “Bitcoin Isn’t that Great of a Hedge Option Against US Stock Losses”


As many of our readers may already know, one of the most prevalent arguments that have been made time and time again in favour of BTC is that the alt-currency is a “much better SOV (Store of Value) than traditional hedges such as gold”.

However, according to John Normand, head of cross-asset strategy with JPMorgan Chase & Co, that argument is not only flawed but also intrinsically broken. To elaborate on his stance, Normand stated that “during the 10 worst monthly performances for the S&P 500”, the world’s premier crypto asset was able to generate positive returns for only three of those months.

The above-mentioned statistics have been compiled from information collected from Bloomberg and JPMorgan.

More on the Matter

On the matter, Normand then went on to say that Bitcoin had been unsuccessful in serving as a haven for the S&P 500's 10-worst months since 2010. If that wasn't enough, the world’s largest crypto asset by total market cap also posted losses that were “atleast two times worse than the index on four other occasions”. These figures when compared to those of gold are quite shocking— especially since the precious metal was positive seven times during the same time period.

Lastly, it is also worth noting that during a recent media appearance, Normand went on record to state the following:

“Bitcoin’s correlation over the past year with all other markets has been near zero, which would seem to position it better than the yen or gold for hedging purposes. Low correlations have little value if the hedge asset itself is in a bear market, however.”

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