Before now, strategists at JPMorgan compared Bitcoin with gold, viewing BTC as a new digital store for it.
Investment banking giant JPMorgan Chase &Co (NYSE: JPM) believes that fintech, not Bitcoin, will dominate the financial services amid the persisting Covid-19. According to JPMorgan, Bitcoin is just an “economic side show.”
Despite the crypto frenzy over the past months, analysts at JPMorgan said cryptocurrency still lacks some factors preventing it from becoming a mainstream asset.
Notably, Bitcoin has been pulling in increases over the past year and has also recorded new highs. On the 20th of February, Coinspeaker reported that Bitcoin hit a new all-time high of over $56,400. Also, the overall crypto market value spiked above 5% to $1.7 trillion in 24 hours.
Since news on Tesla’s (NASDAQ: TSLA) $1.5 billion investment in Bitcoin became public, BTC has continually recorded increases. Since then, Bitcoin has jumped about 40%. At the time of writing, Bitcoin is down 10.11% to $50,133.41.
Apart from Bitcoin, altcoins have also been performing excellently. Recently, top altcoins also reached respective highs. Ether (ETH) topped $2,000 for the first time in history. Currently, ETH is down 13.63% to $1,596.26. Ethereum has been surging since the beginning of 2021. The second-largest crypto asset by market cap has gained about 170% in its year-to-date record.
The native cryptocurrency of the Binance blockchain, Binance Coin (BNB), also recorded the most outstanding increase of over 120% on weekly charts. The Coinspeaker report noted that BNB reached a new ATH of $332. However, BNB price has corrected and is currently down 15.02% to $234.64.
JPMorgan Says Fintech Is Real Financial Transformational Story of Covid-19 Era
According to a CNBC report, analysts at JPMorgan tied Bitcoin’s constant gains to Tesla’s announcement to begin accepting BTC as a form of payment. Also, the analysts noted the announcement by the world’s largest custodian bank BNY Mellon (NYSE: BK) to offer Bitcoin services as a factor fueling Bitcoin’s rally. Moreover, Mastercard Inc (NYSE: MA) has also announced plans to begin facilitating crypto transactions.
Despite the crypto rally, JPMorgan wrote:
“But fintech innovation and increased demand for digital services are the real Covid-19 story with the rise of online start-ups and expansion of digital platforms into credit and payments.”
Before now, strategists at JPMorgan compared Bitcoin with gold, viewing BTC as a new digital store for gold. The strategists considered Bitcoin’s limited supply of $21 million. Additionally, JPMorgan strategist predicted earlier that Bitcoin could climb as high as $146,000.
In early January, JPMorgan wrote in a note that BTC could hit $146,000 as it competes with gold as an alternative currency. However, the investment giant said that Bitcoin’s volatility would need to reduce significantly to boost investment confidence among institutional investors.
In the CNBC report, JPMorgan revealed that digital finance and demand for fintech alternatives is “the real financial transformation story of the COVID-19 era.”
“Traditional banks could emerge as endgame winners in the digital age of banking due to their advantage from deposit franchise, risk management and regulation,” added the investment banking company.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.