According to a note from banking giant JPMorgan, Bitcoin is a risky asset with a lot of upside potential, but not a safe haven. While many people investors consider Bitcoin as a safe haven, the analysts at JPMorgan disagree. The writers of this note claimed that describing BTC as a risky asset is more suitable than a safe haven because it has proved its correlation with the S&P 500 since March.
Bitcoin’s long-term potential is huge
According to the note, institutional investors are also interested in Bitcoin, giving legitimacy and credibility to Bitcoin. Nowadays, many institutions see Bitcoin as a viable investment and it is a really important factor to consider. For instance, PayPal announced its support for Bitcoin and altcoins recently. Institutions and corporations don’t accept new concepts easily and this acceptance can be a positive sign for the future of BTC.
The writers of the note say that they have noticed a rapid growth in corporate interest in Bitcoin. We’ve seen a lot of activity in Bitcoin futures and options markets recently. This increased utility can be good news for Bitcoin and it shows that institutional players have accepted BTC as a vehicle of investment.
According to the note, the store of value aspect is not the only element for Bitcoin’s growth. If Bitcoin and other cryptocurrencies are adopted as a medium of payment as well, their price could increase substantially. Although Bitcoin is a volatile asset and it may display a lot of volatility in the short term, its huge long-term potential is undeniable.
When comparing Bitcoin to gold, we can see that BTC offers a lot of advantages. Bitcoin’s supply is limited to 21 million Bitcoins and this virtue gives BTC anti-inflation properties – nobody can print more BTC at will. Bitcoin is divisible and it can be transferred around the globe quickly and relatively cheaply. You can conveniently keep Bitcoin and the only thing that you need is a digital wallet.
The technology behind Bitcoin has revolutionary potential – blockchain technology many different use cases in addition to cryptocurrencies. It can be utilized in banking, medical care, education, and many other industries. JPMorgan’s note reiterated the huge upside potential of Bitcoin. The interest from the young generation is a key factor here. Young people are likely to rush to Bitcoin in the coming years and demand for BTC will increase sharply. If we combine this potential increase in demand with Bitcoin’s limited supply, the growth could truly be dramatic.
Edward is a finance expert that experienced the 2007 stock market crash first hand. In 2010, he discovered Bitcoin and has been a cryptocurrency advocate ever since.