JPMorgan Says Bitcoin is a Resilient Asset for Surviving March Meltdown
JPMorgan, one of the world’s leading investment banks, has described the world’s most dominant cryptocurrency Bitcoin as resilient for surviving March’s global financial meltdown.
In a note sent to clients on June 11, JPMorgan analysts said Bitcoin has shifted from an uncorrelated asset to one whose price now closely tracks traditional stocks.
“Though correlations were modest and mostly mean-reverting around zero for much of the past couple of years, in recent months they have moved sharply higher in some cases (equities) and lower in others (U.S. dollar, gold),” wrote the analysts led by Joshua Younger.
This is largely due to what Investors King highlighted last week that institutional investors now dictate price movement in the crypto market, not the usual retail investors.
The analysts, who usually cover traditional assets like bonds, highlighted Bitcoin’s success against traditional assets in March on a volatility-adjusted basis. They noted that the liquidity on top Bitcoin exchange platforms was surprisingly more resilient than gold, U.S. Treasury bonds and other traditional assets.
Similarly, they said while Bitcoin liquidity drop during the peak of the crisis, it rebounded faster than other assets. They said this “suggests that bitcoin saw among the most severe drops in liquidity around the peak of the crisis in March, but that disruption was cured much faster than other asset classes.”
“At this point, bitcoin market depth is above its 1-year trailing average, while liquidity in more traditional asset classes has yet to recover.”
This is coming after Goldman Sachs rubbish the dominant cryptocurrency in May, saying it is not an investment vehicle.
“Cryptocurrencies including bitcoin are not appropriate as an asset class,” stated Goldman Sachs to clients in May.
While JPMorgan did not disagree with Goldman Sachs’s position, the analysts said at least one thing is certain, Bitcoin is a resilient asset, if not a stable or useful currency.
They also agreed that the coin did not live up to its reputation as a port in a storm despite its resilient market structure during the peak of the global pandemic in March.
“There is little evidence that bitcoin and others served as a safe haven (i.e., ‘digital gold’)—rather, its value appears to have been highly correlated with risky assets like equities,” the report concluded. “This all likely points to the continued survival of the asset class, but likely still more as a vehicle for speculation than as a medium of exchange or store of value.”
Pizza Hut Joins Burger King, Church’s Chicken to Accept Crypto Payments in Venezeuela
Pizza Hut has joined other global fast-food chains like Burger King and Church’s Chicken already accepting crypto payments in Venezuela.
This was confirmed by a crypto services firm, CryptoBuyer, on November 27 after pizza Hut stores in the South American nation partnered with Mega Soft to drive adoption in Venezuela by encouraging crypto payments in its over 20,000 shops and businesses in the country.
“Pizza Hut nowadays cannot be detached from these technological advances and all those incorporating new approaches for daily necessities,” said Richard ElKhouri, General Director for Venezuelan operations of the pizza chain, in an interview with local news outlet ElAxioma. “It is important that we accommodate young people, modern adults, and people technologically knowledgeable.”
According to Elkhouri, customers can buy pizza with Bitcoin (BTC), Litecoin (LTC), Dash (DASH), Binance Coin (BNB), Binance USD (BUSD), Ether (ETH), Tether (USDT), Dai (DAI), and its native token XPT.
This will further help deepen cryptocurrency adoption in the country and across the South American region.
Bitcoin Rebounds; Gained 7 Percent to $18,116 Per Coin Amid Renewed Demand
Bitcoin recovered most of its lost ground in the last 24 hours after dropping about $3,000 from $19,400 it exchanged a week ago to $16,800 per coin.
The world’s most dominant cryptocurrency gained 7.01 percent to close at $18,116.31 per coin on Monday morning at 8:46 am Nigerian time.
Investors jumped on the digital currency after Guggenheim Funds Trust filed an amendment with the U.S. Securities and Exchange Commission to allow its Macro Opportunities Fund to invest as much as 10 percent or $500 million of its $5 billion net asset in Bitcoin through Grayscale Bitcoin Trust (GBTC).
The news bolstered Bitcoin attractiveness as cryptocurrency investors interpreted as a new capital inflow that could aid the coin above the $20,000 per coin obstacle or resistance.
According to the amendment filed: “The Guggenheim Macro Opportunities Fund may seek investment exposure to bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust (“GBTC”), a privately offered investment vehicle that invests in bitcoin. To the extent the Fund invests in GBTC, it will do so through the Subsidiary.”
Cryptocurrency: Facebook Owned Libra to Launch Stablecoin in January 2021
Facebook Inc led Libra Association is planning to launch Libra stablecoin pegged to only the United States Dollar as early as January 2021, according to three anonymous people quoted by the Financial Times.
The stablecoin was initially proposed to be pegged to a basket of multiple currencies before the group faced several setbacks after the US parliament pressure Facebook on data breach and other issues that allegedly allowed Russia to meddle in the 2016 US presidential election.
The social media giant has now cut down on its ambition to focus on US dollar-pegged stablecoin in an effort to reduce regulatory bottleneck.
PayPal Inc., one of the first members of Libra Association that pulled out after regulators increased scrutiny on Facebook operations, has since started a cryptocurrency exchange business.
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