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JPMorgan Strategists Suggest 1% Crypto Allocation To Clients

February 26, 2021 3:05 pm
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JPMorgan Strategists Suggest 1% Crypto Allocation To Clients

What Happened: Strategists at JPMorgan Chase & Co. (NYSE:JPM) have endorsed a one percent allocation to Bitcoin in a note to clients.

Analysts from the multinational investment bank have suggested that such an allocation could serve as a hedge against fluctuations in traditional asset classes like equities, bonds, and commodities.

According to Bloomberg, JPM strategists Joyce Chang and Amy Ho stated, “In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio.”

Why It Matters: JPMorgan is one of the few Wall Street banks that have predicted a shift towards crypto from more traditional asset classes last year.

Earlier this year, another JPMorgan strategist Nikolaos Panigirtzoglou said that the digital asset could be worth as much as $146,000. According to him, at this price point, Bitcoin’s market value would be on par with the market value of gold.

Despite the constant comparisons to gold as an inflation hedging asset, Bitcoin still remains a fairly volatile asset class.

The market-leading cryptocurrency was down by over 7% in the past 24-hours to $46,425 at press time.

Price Action: JPMorgan shares traded at $148,05, 2.06% lower, at press time.

Bitcoin was down by over 5.37% in the past 24-hours to $46,876 at press time.

Image: Matthew Foulds via Unsplash

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