JP Morgan attributes the correlation between Bitcoin and the S&P 500 to millennials. The financial company notes that young people do not see Bitcoin as just another investment, but as an alternative to the US dollar.
Long gone are the days when the senior executives of the financial company JP Morgan considered Bitcoin (BTC) a fraud. Now, this institution welcomes cryptocurrencies, praises them, and even develops them.
In this context, the financial group recognizes that investors are currently interested in assets as an alternative to national fiat currencies. However, the investment that the latter choose varies according to their age, since the younger buy Bitcoin and the older prefer gold.
Concerning the stock market, JP Morgan, under the leadership of Nikolaos Panigirtzoglou, states that millennials are buying shares in technology companies. Instead, older people are disposing of their shares to move to less volatile instruments like bond funds.
The company attributes the increase in the correlation between Bitcoin and the S&P 500 since March precisely to millennials and their investments. Furthermore, they note that the younger do not see Bitcoin as a mere investment but as a currency alternative to the US dollar.
After hearing the JP Morgan group’s remarks, Michael Sonneshein, director of fund management company Grayscale, approved of the millennials’ decision. To do this, he used an analogy typical of ice hockey: “You have to skate where the puck is going, not where it has been.”
JP Morgan-Bitcoin Relationship: Complex Beginning and Happy Ending
Unlike gold, a metal that John P. Morgan considered to be the only true money, the JP Morgan company did not always look favorably on Bitcoin and cryptocurrencies. However, this perspective has been changing over the years.
In September 2017, the CEO of this banking institution, Jamie Dimon, attacked Bitcoin calling it fraud. Besides, he said on that occasion that he would fire any employee of his who was trading with Bitcoin as he considered it “stupid”.
A month later, he called Bitcoin a fraud again, stating that investors who trusted the cryptocurrency would “pay the price” for investing in “something so stupid.”
In those same days, Dimon spoke about Bitcoin and, with a less aggressive attitude, said that he saw something good in it: blockchain. The banker argued that this technology “could be used for digital dollars.” Also, JP Morgan had already been experimenting with blockchain for a year.
Soon after that, the company was charged in Swedish courts with market manipulation. A few days after Dimon’s statements, and after Bitcoin’s price fell, JP Morgan was one of the most prominent buyers of the crypto asset.
Since then, they began a stage of progressive public acceptance and, in certain cases, incorporation of cryptocurrencies.
As an illustration of the saying “if you can’t beat them, join them”, JP Morgan announced in February 2019 the development of its cryptocurrency: JPM Coin, a stablecoin that maintains parity with the US dollar.
Regarding Bitcoin, the company has stressed during the COVID-19 crisis that it can “overcome adversity better than other traditional markets.” This is one of the features that make Bitcoin the best option for investors in the market.
By Alexander Salazar
