JP Morgan – Big Enterprises May not Pursue Tesla’s Bitcoin Investment Initiative
Analysts at JPMorgan Chase, a multinational investment corporation headquartered in the US, trusts that purchase of $1.50 billion worth Bitcoin (BTC) will not inevitably pave way for a heap of comparable investments.
A team of JPMorgan analysts headed by Nikolaos Panigirtzoglou supposedly justified that Bitcoin’s highly fluctuating characteristic could maintain mainstream corporate treasurers afar from Bitcoin.
According to Bloomberg report, in a note to investors, the analysts wrote: “The main issue with the idea that mainstream corporate treasurers will follow the example of Tesla is the volatility of Bitcoin.”
As per JPMorgan, even a minimum quantity of Bitcoin in corporate treasures’ portfolios would be linked with a high degree of threat as such enterprises usually ensure their portfolio fluctuation at about 1%.
Also in case Bitcoin represents just 1% of aggregate allotment, it “would cause a big increase in the volatility of the overall portfolio,” likely leading the portfolio’s fluctuation to a maximum of 8% due to Bitcoin’s yearly volatility of 80%, the analysts stated.
On February 8, Elon Musk’s Tesla Motors revealed through the SEC (Securities and Exchange Commission) filing that it has invested $1.50 billion in Bitcoin. The revelation aided a sharp rise in an otherwise bullish crypto market, with Bitcoin consequently reaching a fresh all-time peak of over $48,000.
A portion of cryptocurrency players also forecast that the US tech firm Apple could be the subsequent institutional investor to invest in Bitcoin.
Following the sharp price movement, several prominent people in cryptocurrency sector, including Galaxy Digital founder Michael Novogratz voiced optimism that “every company in America” will pursue the path of Tesla’s plan to set aside a portion of their balance sheets to Bitcoin. Michael Sonnenshein, CEO of Grayscale Investments, also forecast that the world will soon witness several “other visionary leaders and disruptive companies actually realizing it has really moved from why to why not.”
"You have @ElonMusk @michael_saylor @jack. You're going to see a lot of other visionary leaders and disruptive companies actually realizing it has really moved from why to why not," says @sonnenshein on corporations investing in #bitcoin pic.twitter.com/6FnwEjGFNL
— Squawk Box (@SquawkCNBC) February 10, 2021