Strategist at JPMorgan Chase, one of the largest investment banks in the US, They believe Tesla’s $ 1.5 billion purchase of Bitcoin (BTC) won’t necessarily spark a wave of similar investments.
A group of JPMorgan strategists, led by Nikolaos Panigirtzoglou, argued that Bitcoin’s high volatility could keep its established corporate treasurers away from Bitcoin. “The main problem with the idea of traditional corporate treasurers following Tesla’s lead is Bitcoin’s volatility.” Strategists wrote a note to investors, Bloomberg reported on Tuesday.
According to JPMorgan Even a small portion of Bitcoin investing in corporate treasury portfolios would be high risk as these companies tend to keep their portfolio volatility close to 1%. Even if Bitcoin accounts for 1% of the total allocations, it would “result in a large spike in overall portfolio volatility,” which could increase portfolio volatility from 80% to 8% due to Bitcoin’s annualized volatility, according to Strategen.
Elon Musk’s Tesla Motors hit the headlines on February 8th Announcing a $ 1.5 billion purchase of Bitcoin from the US Securities and Exchange Commission The news sparked a parabolic rise in the already rising cryptocurrency market, and Bitcoin hit one afterwards new all-time high of over $ 48,000.
After taking the big step in Bitcoin, a number of key figures in the crypto space, including the founder of Galaxy Digital, Michael Novogratz was confident that “all companies in the US” will follow Tesla’s decision to allocate part of his balance sheet to Bitcoin. The CEO of Grayscale Investments, Michael Sonnenshein too predicted that the world will soon see many “other visionary leaders and disruptive corporations who really realize that it really hasn’t moved from the why to the why”.
Some names in the cryptocurrency world speculated about this as well US tech giant Apple could be the next institutional player to take over the crypto asset.