One day after Jamie Dimon slammed bitcoin, sending its price reeling after he called the cryptocurrency "fraud", warning it "won't end well", and threatening to fire any JPMorgan trader caught trading bitcoin "for being stupid" (a move some dubbed diplomatic genius as JPM's 20% guide down in trading revenues got zero mentions yesterday) JPMorgan has released its unofficial guide on bitcoin. While that was perhaps to be expected as we are confident the bank was flooded with phone calls from clients who were long the best performing asset class of the year, if not decade, what is much more surprising is who the author of said report was: none other than JPM's notorious quant guru, Marko Kolanovic, who simply asks "are cryptocurrencies a new asset class or a pyramid scheme?"
While we know how Jamie Dimon feels, Kolanovic's conclusion is less draconian, if mostly along the skeptical lines of his boss' thinking: "While we don’t know whether the price of cryptocurrencies will go up or down in the near-term, the history of currencies, governments and financial fraud tells us that the future for cryptocurrencies will likely not be bright."
Report - JPMorgan
Here is the full report from JPMorgan:
Are Cryptocurrencies a New Asset Class or a Pyramid Scheme?
Cryptocurrencies - Number - Market - Strategies - Researchers
What are Cryptocurrencies? Recently, a number of sell-side market strategies and researchers opined on the merits of investing in Bitcoin and other cryptocurrencies. Some went as far as introducing price targets and making relative value calls on cryptocurrencies vs. other asset classes. The number of cryptocurrencies now existing is in the hundreds (~$150bn total assets), and there are dozens of cryptocurrency hedge funds launched (e.g. here). Developments arounds distributed ledgers and the concept of digital currencies are fascinating from a technological point of view. It is likely that some of these technologies will become very valuable. The supply...
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