Joyce Chan, head of research at JPMorgan, in an interview with CNBC noted that the bank had for the first time seen demand for Bitcoin from institutional investors.
Meanwhile, the analyst expressed concerns about the valuation of the leading cryptocurrency, whose market capitalization has risen by $700 billion since September, while inflows totalled only $11 billion.
Earlier, she, along with colleague Amy Ho, recommended bank clients to allocate 1% of their portfolio in Bitcoin and other cryptocurrencies as a hedge against equities, bonds and commodities.
Chan believes that demand for alternatives to traditional investments will persist, but with respect to Bitcoin as a hedge against market declines she noted:
“Right now, during a serious drawdown in capital, we haven’t seen it as an effective hedge.”
She reaffirmed her view of the intensifying competition between fintechs and traditional banks amid the pandemic.
“Financial technology is becoming mainstream after this pandemic, as there is real demand for digital services — fewer in-person transactions,” says Chan.
Earlier, JPMorgan said it was ready to support Bitcoin trading should there be client demand.
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