Why This J.P. Morgan Executive Says Clients Want to Invest in Bitcoin
The hunger for Bitcoin exposure is on the rise, despite the recent bearish price action. At least, that’s what some J.P. Morgan clients have told the banking giant, according to Mary Callahan Erdoes.
CEO for J.P. Morgan Asset & Wealth Management, Erdoes believes that blockchain technology is more relevant than Bitcoin. The former, said the executive, has changed the way in which J.P. Morgan and other institutions interact with the financial market.
J.P. Morgan has been skeptical about Bitcoin; its CEO Jamie Dillion has called BTC a fraud. His infamous words, “(BTC) it’s worse than tulip bulbs” continue to resonate with the crypto community even as the banking titan seems to be warming up to cryptocurrencies.
Despite his CEO’s position, the bank has been trying to leverage blockchain technology and issued its own JPM Coin. Develop by their blockchain department “Onyx”, the token seems to be part of a greater strategy that would involve major banking institutions, an AUMM with swap capacity, and other features.
The executive highlighted the ongoing discussion within the banking institution on whether Bitcoin should be deemed an asset class. However, J.P. Morgan’s clients seem to already for an opinion of their own. Erdoes said:
A lot of our clients say that’s an asset class, and I want to invest, and our job is to help them put their money where they want to invest.
The CEO for J.P. Morgan Asset & Wealth Management clarified that the bank doesn’t consider BTC an asset class “per ser”. The bank has concerns over BTC’s price-high volatility. Erdoes concluded: “only time will tell”.
Institutional Interest In Bitcoin Remains Strong?
In addition, to their Onyx division, J.P. Morgan and other major banks in the U.S. will allow their clients with over $5 million in their accounts to invest in BTC.
In the meantime, institutional clients must gain exposure via approved investments products, such as the Grayscale Bitcoin Trust (GBTC). They can also acquire shares of companies with BTC as part of their treasury, such as Michael Saylor’s MicroStrategy, Elon Musk’s Tesla, and Jack Dorsey’s Square.
However, the recent bearish trend has taken its toll on institutional participation in the crypto market. A recent report by Glassnode suggests that the performance of the GBTC, the approved Bitcoin ETFs in Canada, and other BTC-based investment products show a lack of institutional interest.
The GBTC has been trading at an important discount for around 3 months. This is due to investors migrating to alternative products, such as Gold ETFs, according to J.P. Morgan’s analyst Nikolaos Panigirtzoglou. He said:
Institutional interest in Bitcoin and other cryptocurrencies has dried up and even turned negative in May 2021. It’s probably close to flat at the moment. The most important thing to notice is that institutional interest started slowing down in April 2021, before the May correction.
At the time of writing, BTC trades at $29,615 with a 3.9% and 11.2 loss in the daily and weekly chart.Source