JPMorgan analysts have opposed Bitcoin as an alternative to gold. The first cryptocurrency will not protect an investment portfolio during a market crash. This is stated in a new report from the company, according to Bloomberg.
According to JPMorgan strategists John Normand and Federico Manicardi, bitcoin is “the least reliable hedge in times of strong market pressure.”
The massive adoption of cryptocurrencies is leading to the use of bitcoin to increase capital earned on the rise of the stock market. Accordingly, the digital currency will be correlated with other assets.
“Popularization of cryptocurrency ownership increases correlations with cyclical assets, potentially transforming it from insurance to leverage. This reduces the benefits of diversification and leads to lower performance during a crisis, ”the strategists added.
JPMorgan is confident that Wall Street whales are now driving Bitcoin. The first cryptocurrency has become a cyclical asset, analysts said.
Earlier, JPMorgan said that for the rally to continue, bitcoin must gain a foothold above $ 40,000, otherwise the asset could fall to lower levels.
Recall that on December 21, the investment director of Guggenheim Partners, Scott Minerd, predicted a decline in the price of the first cryptocurrency to $ 20,000. He believes that Bitcoin has already reached its peak of its market value this year.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
