US-based investment bank JP Morgan has claimed that the only way cryptocurrencies could have value is in a “dystopian economy,” wherein all faith had been lost in major reserve assets.
JP Morgan CEO and chairman Jamie Dimon recently admitted that he took no pleasure in Bitcoin’s demise over the past year, despite calling it a “fraud” in 2017.
And now his firm has reiterated the notion that the cryptocurrency markets are flailing to obscurity, writing of their long-running “skepticism” of the digital asset class.
“We have long been skeptical of cryptocurrencies’ value in most environments other than dystopia, characterised by a loss of faith in all major reserve assets (dollar, euro, yen, gold) and in the payments system,” JP Morgan analysts wrote in a note, as quoted by Business Insider.
#Bitcoin has not been a good hedge against stock market corrections! It underperformed equities in most of the ten worst months for the stock market since 2013. pic.twitter.com/6rvimum851
— jeroen blokland (@jsblokland) January 28, 2019
“Their boom-bust cycle is similar to the path of gold in the early 1970s, the Nikkei in the 1980s, and technology stocks in the 1990s,” the analysts added.
Cryptocurrencies have often been touted as an ideal hedge against stock market corrections, with Bitcoin itself holding price at the $3,500 range despite being worth under a dollar a decade ago.
However, the report says that the “low correlations have little value if the hedge asset itself is in a bear market.”
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