JP Morgan Recommends Buying Bitcoin

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JP Morgan private bank investment group in February provided a document to their Asian and European clients in regards to investing in cryptocurrency. In summary JP Morgan recommends clients to have 1% of their portfolio invested in cryptocurrency. The fact that one of the biggest banks on the planet is recommending to invest in crypto is another positive step for bitcoin and crypto in general.

“If sized correctly,” bitcoin can be a portfolio diversifier, the bank told its private wealth clients in a new educational deck

JP Morgan uses three metrics to gauge the value and demand for bitcoin. The three stats are very interesting to discuss:

1 - The Metcalfe Law currently has BTC valued at $21,667.

The Metcalfe Law was created almost four decades ago but it predicts the value of an asset through its use in a telecommunication network. You can read more about here

A chart of the BTC value per Metcalfe from Medium posted below illustrates when user base increases the value of BTC would rise about the square amount of users. Note the chart is based on beginning of 2020 which is prior to the start of BTC parabolic run so that is why JP Morgan has over $21k as the reference number now as of Feb. 2021.

2 - The total dollar amount of gold in circulation divided by 21 million BTC equates to $540k.

The limited supply of BTC is causing the value to be a lot higher than what gold is currently worth. Just recently about a month ago there were buzz news that BTC was worth so much that end users could trade BTC for ounces of gold.
Basically at Feburary BTC prices users could trade 0.035 BTC for one ounce of gold. Story reference here.

The trend is benefiting BTC as over the year it cost less and less BTC to trade for an ounce of gold. Gold may always have value in this world, but BTC is becoming even more valuable than gold.

3 - The total amount of currency in the world divided by 21 million BTC equates to $1,904,000.

This is a remarkable number to visualize. The amount of money printing in the past year due to Covid has increase the world money supply dramatically is an understatement. Just for visualization chart below is the USA money supply before and after Covid response in 2020.

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It is almost immeasurable with how much dollar has been injected in the system in order to support the slow down in the economy. This is just America so imagine how the world has also contributed into the world fiat supply. BTC will only continue increasing value based on fiat because the amount of fiat being printed is continuing to rise.

JP Morgan finishes its study by giving a correlation of BTC to other cryptocurrencies and you can see their summary below. Bottom line crypto will moon!

Source of Story Here

None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!


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This will greatly affect bitcoin
and I hope they will invest in bitcoin
This would be a revolution

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!wine

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