JP Morgan: Investors turn to cryptocurrency, only if you lose faith in other assets

Analysts at investment Bank JP Morgan Chase speak about Bitcoin is not as bright as its CEO Jamie Dimon. Recognizing a low correlation cryptocurrency with any other reserve asset, they nevertheless believe that investors pereorientirovanija on cryptocurrencies only in case will be implemented “dystopian scenario”.

Post-capitalist dystopia, according to a note by JP Morgan to clients of the Bank, is a combination of several factors, including the loss of confidence to all primary reserve assets such as us dollar, Euro, yen or gold, and the existing system for payments service in General. Only in this case investors will start to accept Bitcoin and cryptocurrency as a tool of hedging of risks.

Arguments in favor of crypto-currencies as such a tool is the low correlation of the behavior of the stock market and traditional markets. Despite all attempts to find some connection in the behavior of Bitcoin and other assets, evidence to suggest that such a relationship exists, is still there, I believe JP Morgan.

High, which can be say — a little hint at the relationship with individual indicators, such as the index of emerging markets, than in the past year, said Tom Lee of Fundstrat Global Advisors.

However, in the investment Bank believe that overestimate the resemblance isn’t worth it. The behavior of the cryptocurrency, they take off in 2017 and fall 2018, has the most similarities with the cycles of other assets at different times. Something similar happened with gold in the early 1970s, with the Nikkei in the 1980s, and with the shares of American it companies in the 1990s, experts say.

Interestingly, almost a year ago, the same JP Morgan in its report argued that investors refrain from investing in cryptocurrency is not due to the fact that waiting for the implementation of the “dystopian scenario”, and in the absence of a simple and the usual tools. Such as exchange traded funds, or ETFs, which the Bank called “the Holy Grail” for the stock market.

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