JP Morgan backs crypto as preferred alternative asset class

Despite concerns that a bear market is to come, JP Morgan is backing the long-term value of crypto. The banking juggernaut is of the view that Bitcoin is undervalued by up to 25 per cent. Seemingly, the house opinion at JP Morgan is that risk concerns following the USDTerra collapse have soured investors outlook resulting in a selloff and undervaluation.

The bank does not believe that Terra related concerns are suggestive of systemic issues with crypto.

JP Morgan is so bullish on crypto that is has announced that it is its preferred alternative asset class, in favour of traditional alternative assets such as real estate. This is a big call from the bank that had been highly critical of crypto in not so distant history. In 2017, JP Morgan CEO Jamie Dimon, called Bitcoin a “fraud” that will ultimately “blow up”. As he said at a conference at the time: 

“The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”

From “not going to work” to “undervalued,” JP Morgan’s changing opinion of crypto is representative of tradfi more broadly learning to accept that crypto and digital assets are here to stay.