The major US bank JPMorgan advises its customers to add cryptocurrencies to their portfolio.
JPMorgan has come to the dog – more precisely: the honey badger . In a letter available to the news portal Bloomberg , the big bank recommends its customers to invest in Bitcoin Pro and Co. Of course, the big bankers leave the church in the village: the share of crypto currencies in the portfolio should not be more than one percent.
In a multi-asset portfolio, investors can likely add up to 1 percent of their allocation to cryptocurrencies for an efficiency gain in the portfolio’s total risk-adjusted returns,
quoted Bloomberg from the letter JPMorgan sent to its customers on February 24th.
JPMorgan: Bitcoin bull with the handbrake on
The recommendation comes less than a week after JPMorgan warned of an overvaluation of the Bitcoin price. The fact that the bank attests that digital gold is too dependent on the US dollar is not without a certain irony. After all, many Bitcoin investors view BTC as insurance against inflation in the US dollar and other fiat currencies.
The narrative of Bitcoin as a hedge against an unchecked increase in the amount of fiat money has received a new boost from the coronavirus pandemic. Exchange-traded companies have now also discovered Bitcoin as a reserve asset. Since the US IT service provider MicroStrategy declared Bitcoin its most important reserve asset, the company has filled its Bitcoin war chest with over 90,000 BTC.
In the meantime, Jack Dorsey’s FinTech company Square and the e-car manufacturer Tesla have jumped on the Bitcoin bandwagon. Much, especially Jack Dorsey’s Bitcoin bullism, suggests that Twitter could also get into Bitcoin .
BNY Mellon launches crypto services
While JPMorgan is only slowly opening up to Bitcoin, another major US bank is already doing its job. With the New York bank BNY Mellon, the oldest bank in the USA recently announced that it is adding Bitcoin services to its range of services. Specifically, BNY Mellon is currently developing the prototype for a system that will enable the bank to store Bitcoin and other digital assets. The bank had registered an increased need from (potential) customers for such a service in advance. The decision to enter crypto custody was made easier for BNY Mellon by readjustments in the US crypto regulation .
However, if you do not want to rely on the assessments of major banks when putting together your crypto portfolio , you should take a look at the crypto compass : Germany’s first stock exchange letter for digital currencies.