JP Morgan Analyst Says Bitcoin (BTC) is Still Exhibiting “Bubble-Like Properties”, is a Skeptical Investment
According to JP Morgan’s financial outlook team, Bitcoin’s future appears to be extremely bleak and that the asset is only fit for use in some type of “dystopian future” where conventional financial structures have completely collapsed.
If that wasn't enough, a spokesperson for the firm also stated that he no longer had faith in most currencies barring “trusted assets” such as the dollar, euro, yen and gold. On the matter, Managing Director of JP Morgan ‘Jan Loeys’ was quoted as saying:
“We have long been skeptical of cryptocurrencies’ value in most environments other than a dystopian one characterized by a loss of faith in all major reserve assets,”
More on the Matter
Owing to the fact that cryptocurrencies have always been associated with sky-high returns and have had little-to-no correlation with traditional assets like equities and credit, many backers believe that altcoins like Bitcoin and Ethereum are perfect vehicles for investors to diversify their economic portfolios.
With that being said, the folks over at JP Morgan still find crypto assets to be deficient in two key areas:
- Firstly, they believe that it is nearly impossible to extrapolate the past risk-return properties of most digital currencies since they are still so nascent.
- Secondly, a vast majority of altcoins lack the ability to “outperform during periods of equity market drawdowns” — something which many market experts have attributed to the exaggerated evaluation of most digital-tokens.
Speaking on the subject, Loeys went on to state:
“Even in extreme scenarios such as a recession or financial crises, there are more liquid and less complicated instruments for transacting, investing and hedging, in part due to the scale afforded by fiat currencies’ legal tender status,”.
Other Key Data Worth Considering
As many of our regular readers may remember, the stock market as a whole has been struggling quite substantially all though 2018— with the the Dow plunging more than 1,500 points in a single day recently. However, with that being said, it should also be remembered that BTC too has been the victim of a bear market over the course of the aforementioned time frame.
To be more specific, we can see that Bitcoin has lost more than 80% of its value since the start of 2018 (a time when the premier cryptocoin was being sold for a mammoth price point of $20k). At presstime, Bitcoin is trading near the $3,600 mark.
Last but not least, when dishing out his most recent price prediction, Loeys said that he believes that in the coming few months BTC could tumble and fall to as low as $1,260 (provided that current bearish conditions continue to persist).
Even though ICOs as a whole have continued to lose mainstream traction over the past few months (owing to the many loopholes that exist within this fundraising method), more and more use cases have continued to emerge from within the crypto sector.
“Developments over the past year have not altered our reservations about these assets’ role in global portfolios, even if their novelty value can remain high indefinitely,”
However, there are still folks like Jamie Dimon (CEO of JP Morgan) who continue to bash cryptocurrencies— even going as far as calling the entire industry a massive “scam”.
With that being said, it should be noted that Dimon is a big fan of blockchain technology but he still believes that there are many hurdles currently preventing the digital offering from reaching its full potential.
“Blockchain is unlikely to re-invent the global payments system, but instead can provide marginal improvements to various parts of the process. Progress has been made to move blockchain adoption beyond experimentation and use in payments, but development has been largely confined to use cases like smart contracts, record keeping and decentralized applications rather than an institutionalized approach.”