On the same day Goldman Sachs’s head of investment research Steve Strongin said that he believes most cryptocurrencies shall fall to zero as current iterations are “too primitive” to be viable in the long term, their “favourite” competitor, JP Morgan, released a 71 page-long detailed document about Bitcoin titled “Decrypting Cryptocurrencies: Technology, Application, and Challenges.”
We all remember when, in October, JPMorgan Chase & Co’s Chief Executive Officer Jamie Dimon got the market’s attention by calling bitcoin a “fraud” and then adding that “if you’re stupid enough to buy it, you will pay the price for it one day.”
Well, right after that , chief Financial Officer Marianne Lake tried to rescue the situation saying that they are being very open minded to the potential use cases in future for digital currencies that are properly controlled and regulated.
It all expanded this January when Dimon withdrew his previous comments in an interview with FOX saying he regrets making those statements and admitting that “blockchain is real.”
What happened next is that now we have JP Morgan’s one and only “Bitcoin Bible” for investors! Hard to believe, right?
The Bible, which is comprised of 71-pages of crypto, covers topics, says that cryptocurrencies definitely are not going away, but still, they are warning investors about a dropping 50% or so drop in the BTC price to to $4,605.
It says: “If past returns, volatilities and correlations persist, cryptocurrencies could potentially have a role in diversifying one’s global bond and equity portfolio. But in our view, that is a big if given the astronomic returns and volatilities of the past few years.”
The authors also wrote that if cryptocurrencies survive the next few years and remain part of the global market, then they will likely have exited their current speculative phase and would then have more normal returns, volatilities (both much lower) and correlations (more like that of other zero-return assets such as gold and JPY).
They also added that “cryptocurrencies are unlikely to disappear completely and could easily survive in varying forms and shapes among players who desire greater decentralization, peer-to-peer networks and anonymity, even as the latter is under threat.”
The “Bible” also talks about problems regarding illegal transfer of money using digital currencies that forced some countries to ban cryptocurrency trading. USA, South Korea and India are now being individual regulators of virtual currencies. JP Morgan said that “so far, there is little global coordination on cybercurrency regulation.”