JPMorgan Chase’s ongoing love and hate relationship with cryptocurrencies has been great to watch over the years, especially since the explosive growth of the digital asset sector began in early 2021. In comparison, from February to April, the total market value of space doubled. from 1 trillion dollars. Up to $ 2 trillion.
As a result of this meteoric rise, the individual market value of major cryptocurrencies such as Ether (ETH) and Bitcoin (BTC) is higher than existing multinationals, with Bitcoin overtaking Tesla, Tencent, Visa and Berkshire Hathaway, including Alibaba, Facebook and Samsung. …
In 2017, JPMorgan CEO Jimmy Dimon called BTC a “scam” and even said he would fire employees if they dealt with Bitcoin. However, it got ahead quickly over the course of four years and Damon called it a “scam.”
Moreover, he recently appears to have softened his stance on crypto and stated that crypto is here to stay and that it is only a matter of time before governments around the world begin to regulate their domestic digital asset markets with Iron Fist. However, during an event in late 2020, he confirmed that Bitcoin is not his cup of tea.
Times change ‘
Despite Daimon’s somewhat negative outlook on Bitcoin and the crypto industry, recent reports show that JPMorgan is currently gearing up to provide some of its clients with an actively managed Bitcoin fund and is likely to become one of the largest – and most likely – banking institutions to will accept it. crypto.
In fact, there is speculation that the fund could start operating as early as this summer, with insiders claiming that fintech firm NYDIG will offer its deposit services to a branch of the bank.
In addition, it was also reported that JPMorgan’s bitcoin fund would be “actively managed,” in stark contrast to the negative price currently offered by several cryptocurrencies such as Pantera Capital and Galaxy Digital.
Cointelegraph reached out to Sam Tabar, chief strategy officer for Bit Digital, a NASDAQ-listed bitcoin mining company, and former head of Asia Pacific capital strategy at Bank of America Merrill Lynch, who said:
“JPMorgan’s launch of its Bitcoin Fund is simply an inevitable response to growing consumer demand for blockchain. JPMorgan is a company that will do its best. Despite conflicting statements from CEO Jamie Dimon, the company has worked for many years to integrate blockchain technology into the model. ” Business “.
In this regard, it is reported that the Onyx division launched JPM Coin at the end of 2020. Not only that, but the contrast between the previous Daimon notes and the current JPMorgan trend, according to Tabar, is a typical example of the institutionalization process. … He believes traditional structures and leaders will always back down, making JPMorgan’s changing heart a clear triumph for blockchain innovation.
He added: “Many of Damon’s claims stem from a misunderstanding of certain uses of cryptocurrencies such as cryptography and smart contracts.” However, according to Tabar, there was much less information on BTC at the time.
What does GB Morgan’s potential performance in the market mean?
It cannot be denied that the popularity of the cryptocurrency market has skyrocketed in recent months as investors now access the industry through a range of traditional financial instruments, including ETFs, exchange-traded products, and even stocks of companies like Coinbase. As a result, most of the old banking institutions continued to leave space, despite the enormous financial and technological potential.
Felix Simon, head of business development at Dsent AG, a platform for complex digital assets and tokens, and a former marketing manager for the sale of structured investment derivatives at Credit Suisse, believes that banks tend to avoid investment proposals if fundamentals are not matched reality. also not very well proven. He adds:
Historically, BTC has had a good-to-very-good Sharpe ratio, but until 2020, volumes were likely very low – 24 hours on average. It was well below $ 10 billion – so it wasn’t very representative of day to day US dollar trading. Since then, these numbers have increased and futures trading has also become available, so the historical data is now up to date. ”
In its most general sense, the Sharpe ratio can be thought of as a calculation that measures the outcome of an investment in a risk-free asset after adjusting for risk. In other words, it can be used to measure the total return that an investor earns per unit to increase risk.