Crypto traders predict that big companies will copy Tesla’s decision to invest in Bitcoin (BTC); JPMorgan argues otherwise.
JPMorgan strategists led by Nikolas Panigirtzoglou in a note by Bloomberg on Wednesday; “The main problem with the idea that mainstream corporate treasures will follow Tesla’s example is Bitcoin volatility,” he said.
Electric car maker Tesla, headed by Elon Musk, announced its Bitcoin investment worth $1.5 billion on Monday. It subsequently sent the cryptocurrency to new record highs above $48,000. Crypto traders expect other companies to follow suit, arguing that Tesla has confirmed Bitcoin’s appeal as a reserve asset.
However, according to JPMorgan’s strategists, the risk levels of a corporate portfolio are; Even a small investment in Bitcoin can increase in value. According to JPM, this may prevent other companies from purchasing BTC.
JPMorgan, “Corporate treasury portfolios are often filled with bank deposits, money market funds, and short-term bonds. This means that the annual fluctuation or fluctuation range is around -1%,” he said. He further stated that a 1% BTC investment would result in a substantial 8% increase in the volatility of a portfolio.
JPM: Tesla’s investment changed the short-term outlook for Bitcoin
But bank strategists acknowledged the positive impact Tesla investment has had on the Bitcoin (BTC) market. Strategists used the following words:
“Of course, this week’s announcement; It abruptly changed the short-term trajectory for BTC by supporting entries into the space and helping Bitcoin rise above $40,000.”
JPM for failing to keep the benefits of cryptocurrency above $40,000; last month, they showed a bearish stance in BTC. Bitcoin set its historical high of $41,962 on January 8th. Then he spent three weeks in the $30,000-40,000 range. As we have previously reported as
Kriptokoin.com , the break in this range; It came on Monday, following Tesla’s announcement. At the time of writing, Bitcoin (BTC) is trading at $45,300, down 2%.