JP Morgan: bitcoin is a heresy and the worst hedging tool

Source: Sina Finance In a sober assessment, JP Morgan analysts said bitcoin was an “economic heresy” and the worst hedging tool in a stock market crash. The bank said in a memorandum that the current price of bitcoin is much higher than its fair value valuation, and the adoption of bitcoin by mainstream institutions has increased the correlation between bitcoin and cyclical assets, reducing the benefits of bitcoin diversification. “Crypto assets are still seen as the worst hedging tool in a stock market crash, the benefits of diversification are questionable when prices are far higher than production costs, and the correlation with cyclical assets is rising as crypto ownership becomes mainstream,” JPMorgan analysts wrote Some supporters of bitcoin believe that the cryptocurrency is “digital” gold, which can hedge against inflation and the fall of the dollar. Based on this logic, JPMorgan said bitcoin needs to rise to $146000 to match the total private sector investment in gold through ETF funds or bars and gold coins.

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