Posted 1 year ago | by @devadmin
JPMorgan’s analysts have predicted Bitcoin will soon face significant demand following a recent $100 million purchase by MassMutual. The analysts conclude that even more traditional investors, including pension funds, will jump into the cryptocurrency game where they estimate a sum of $600 billion could enter the Bitcoin market.
JPMorgan Chase’s analysts moreover noted that they see significant demand for Bitcoin. They explained that the recent investment of $100 million in the cryptocurrency by insurance giant Massachusetts Mutual Life Insurance Co. (MassMutual) highlights “the potential for additional institutional demand for the cryptocurrency in coming years,” Bloomberg reported. The note adds that the purchase “suggests the adoption of Bitcoin is spreading from family offices and wealthy investors to insurance firms and pension funds.”
The JPMorgan analysts additionally mentioned, “Massmutual’s Bitcoin purchases represent another milestone in the bitcoin adoption by institutional investors,” adding the following:
“One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow Massmutual’s example.”
However, the analysts further expressed that traditional investors such as insurance companies and pension funds will face regulatory barriers relating to the “risk levels and liability mismatches” that would ultimately restrict how much they can invest of their funds in Bitcoin.
As such the analysts stated that they don’t expect large insurance companies and pension funds to dive into Bitcoin with heavy bags. Although, they still maintain that just a small portfolio allocation, like 1%, in BTC could see its market grow significantly.
The analysts added, with the fact that Bitcoin is outperforming most other assets this year, “if pension funds and insurance companies in the U.S., euro area, U.K. and Japan allocate 1% of assets to Bitcoin, that would result in additional Bitcoin demand of $600 billion,” the news outlet reported.
As Bitboy Crypto reported, JPMorgan has previously published a brief report acknowledging Grayscale trends involving Bitcoin, stating the leading digital asset was acting as an “alternative to gold.”
JPMorgan has for years flip-flopped on Bitcoin, with its founder Jamie Dimon at one point saying it was worthless on par with Warren Buffett’s comments about the cryptocurrency. In fact, JPMorgan chief executive Jamie Dimon called bitcoin a “fraud” in September 2017. and even made comments about JP Morgan employees owning any would be fired.
Although, around the same time JP Morgan’s head of digital treasury services Umar Farooq said the following comment.
“We are supportive of cryptocurrencies as long as they are properly controlled and regulated,” Farooq, JP Morgan’s head of digital treasury services and blockchain, said back in 2017.
As Forbes reports, the company led by Dimon, turned around its message about cryptocurrency and began diving into the industry. Earlier this year, the bank added its first crypto exchange customers and Dimon reportedly hosted secret meetings with the boss of major bitcoin and crypto exchange, Coinbase.
That’s not all though, around the same time, JP Morgan approved two bitcoin exchanges’ accounts for use with its bank, Gemini and Coinbase, The Wall Street Journal reported. Several analysts at JPMorgan are hopeful that numerous payment companies will enable their clients to buy BTC via their apps, akin to Square’s Cash App. This is likely alluding to the highly speculated confirmed rumor that Paypal is getting ready to jump into the digital currency space within the next couple months.
Fidelity another investment bank has bet on a “wave” of people investing in Bitcoin. Fidelity also added that Bitcoin could see its market cap surge to $2 trillion if certain conditions are met. As Bitboy Crypto reported, the Fidelity report indicated that institutional interest could increase Bitcoin’s market capitalization by up to $1.3 trillion by capturing just 10% of investments from the alternative investments and fixed income market valued at $13.4 trillion.
As Max Keiser the host of the Keiser Report and Orange Pill has stated we could witness a “supply shock” which will fuel Bitcoin’s sudden rise to $1 million, making it “almost impossible to buy bitcoin as price rockets higher.”
Keiser further added that PayPal’s new support for Bitcoin alone is more than the daily supply of BTC being mined. This means if Paypal alone is sucking up the daily reward supply for BTC, there won’t be enough for institutional investors to buy, as a result, the price would surge due to supply versus demand. It’s important to also include the metric of lost BTC which is measured at around 2-3 million. That leaves us with around 15,571,531 – and 16,000,000 BTC in circulation, less than most even realize.
Bitcoin is currently trading at [FIAT: $19,379.29] UP +1.2% in the last 24 hours according to Coingecko at the time of this report.