Gaining a small portion of gold investors would triple the price of BTC. PayPal’s endorsement of Bitcoin will make it easier for millennials to use it as an alternative currency.
After criticizing Bitcoin for many years, JPMorgan has gradually changed its attitude towards the first cryptocurrency. Last October 24th, this investment bank took a very favorable position on Bitcoin. It said that this cryptocurrency has great long-term potential to compete with gold. “The main reason for this competitive strength of Bitcoin is the incorporation of millennials as a key group of investors.”
Last October 23rd, JPMorgan sent the newsletter Flows & Liquidity, Bitcoin’s Competition with Gold to all its customers. The following day, several Twitter users, including investor Dan Tapiero, disclosed the document.
Tapiero thinks that this is JPMorgan’s most bullish commentary on Bitcoin that he has ever read. He said that “even a modest crowding out of gold as an alternative currency will multiply the growth of Bitcoin.” The report reached all the customers of the bank. The PayPal announcement “covers” for other traditional players to get involved.
The investor accompanied the tight summary in his tweet with a partial transcript of the JPMorgan newsletter. However, Twitter user @16trippingborys posted it in full.
JPMorgan highlights that PayPal’s decision last October 22nd is key to institutional support for Bitcoin.
According to JPMorgan’s newsletter Flows & Liquidity, Bitcoin’s rise began to receive corporate support through Square and MicroStrategy in recent months. PayPal’s recent endorsement is another big step towards corporate support for Bitcoin. The financial institution considers that it will facilitate and improve the use of Bitcoin as an ‘alternative’ currency in the future.
JPMorgan insists that younger investors have a preference for “alternative” currencies, while older investors prefer gold. The investment bank observes a correlation between the interest in gold and the interest in Bitcoin from the two respective cohorts.
Older investors look for gold-based exchange-traded funds (ETFs), while millennials look for the equivalent of Bitcoin ETFs. These do not formally exist, but users can acquire and trade the shares of Grayscale’s Bitcoin fund, which are conceptually close to ETFs.
Millennials will have a growing weight in the universe of investors and, by preferring Bitcoin as an “alternative” currency, Bitcoin’s competition with gold will strengthen, according to the report. “A modest migration from gold to Bitcoin as an alternative currency in the long term would imply doubling or tripling the price of the cryptocurrency,” says JPMorgan.
Last May, JPMorgan announced that it would offer support to exchanges Coinbase and Gemini for their operations with Bitcoin and other cryptocurrencies. The following month, a study by JPMorgan highlighted that Bitcoin and other cryptocurrencies recovered more quickly from the economic collapse of March 12th than traditional assets.
The relevance of Bitcoin has become increasingly evident this year. The cryptocurrency has recently caught the interest of important international institutions like PayPal and JPMorgan. The advantages that this crypto asset offers and its well-known ability to overcome crises make it the best option for financial investors.
By Willmen Blanco