JPMorgan Bank is Now Fully on Bitcoin!

Goldman Sachs has recently shown its hostility towards Bitcoin, but JPMorgan – the other international mega-bank – seems to have turned its jacket over for good. The good behavior of the course would prove that bitcoin is a mature asset class.

Bitcoin Passes its Financial Crisis Stress Test

The multinational Bank, JPMorgan Chase & Co has come a long way since its CEO, Jamie Dimon, called Bitcoin “fraud” and the recent punishment for overcharging their bank customers for cryptocurrency purchases. Already, in May, we learned that JPMorgan accepted the exchange platforms Coinbase and Gemini as customers.

And in a recent report revealed by Bloomberg, JPMorgan even goes so far as to say that Bitcoin’s behavior was ”  mostly positive  ” following the mid-March crashes across all markets.

In this report entitled “Cryptocurrency takes its first stress test: Digital gold, pyrite, or something in between?”, JPMorgan experts analyze the price movements of Bitcoin and compare them with other asset classes.

Thus, even at the worst moment of the panic linked to the COVID-19 pandemic, its valuation in dollars only briefly dropped below its production costs.

Relationship between the price of Bitcoin and its cost of production – Source: JPMorgan

Bitcoin’s Market Structure More Resilient Than Gold

The good reaction from Bitcoin, and cryptocurrencies in general, makes analysts at JPMorgan say that this ensures them a certain ” longevity as an asset class “.

However, their price movements seem to indicate that crypto-assets continue to be used more as a vehicle for speculation than as a medium of exchange or a store of value.

This remains to be put into perspective with other asset classes. So, although Bitcoin experienced a sharp drop in liquidity at the height of the crisis, that liquidity recovered just as quickly.

All these good performances of Bitcoin in 2020 make the experts of the JPMorgan say that this demonstrates the growth and maturation of the market.

All the lights seem green for the near future of Bitcoin. In addition to the burst of interest from institutional investors in cryptos, even very large banks now admit the potential of Bitcoin.