JPMorgan urges abandoning Bitcoin in favour of fintech

Bitcoin is at most an “economic spectacle,” and the main upshot of the COVID-19 pandemic will be the rise of fintech. This is the view presented in a new JPMorgan analyst report, according to CNBC.

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“The real story of COVID-19 is fintech innovations and the rising demand for digital services that have pushed digital platforms to add payment and lending services”, the experts stressed.

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Experts expect intensified competition between fintechs and traditional banks, as the latter ramp up investments to bridge the technological gap and lobby for regulatory constraints. JPMorgan believes fintechs have a better chance of winning this fight due to their broad deposit bases, risk management and regulation.

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Experts noted unresolved issues with Bitcoin that could prevent it from becoming a popular asset, despite the impressive rally in recent weeks.

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Analysts allowed for Bitcoin to rise to $146,000 amid competition with gold as an inflation hedge.

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They added that the realization of this forecast depends on Bitcoin’s volatility. Its value would have to fall to the level of the main precious metal, a process that may take years. Otherwise the price of Bitcoin will remain unstable.

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In JPMorgan they doubt the capabilities of cryptocurrencies to diversify investment portfolios, calling them an “inadequate hedge”.

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Earlier, JPMorgan analysts had criticized bitcoin for its volatility. критиковали биткоин за его волатильность. In their view, это выступает препятствием для размещения корпорациями резервов ликвидности в криптовалюте.

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Earlier, JPMorgan expressed willingness to support trading of the first cryptocurrency when there is demand from clients.

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