JPMorgan’s strategists were quick to identify the fact that Tesla’s entrance into the crypto space was a major positive factor for the industry.
Many crypto analysts and enthusiasts have remained giddy and shown a positive outlook to the news of Tesla’s acquisition of the leading crypto asset Bitcoin. However, leading financial institution JPMorgan believes there is no reason for optimism as this step by Tesla may not trigger an influx of institutional investors into the industry.According to a report by Bloomberg, strategists at JPMorgan, led by Nikolaos Panigirtzoglou, have said that corporate investors might be reluctant in investing in Bitcoin because of its price volatility. Tesla’s investment in the crypto industry had led many to predict that other institutions would follow suit especially as a hedge against inflation.Tesla’s purchase had also pushed the value of the asset to a new all-time high of over $48,000 before the price corrected to a lower price. However, crypto analysts believe that the price of the asset would go much higher if more corporate institutions were to invest in the crypto king.JPMorgan’s strategy noted that any institution that exposes itself to Bitcoin would increase its risk level to new highs. This exposure could stand as an albatross to those who might want to invest in it. The bank wrote that a “1% bitcoin exposure would cause a significant increase in a portfolio’s volatility to as much as 8%.”JPMorgan: Move by Tesla Is Still Positive for the IndustryJPMorgan’s strategists were quick to identify the fact that Tesla’s entrance into the crypto space was a major positive factor for the industry. The strategists wrote that “this week’s announcement changed abruptly the near-term trajectory for Bitcoin by bolstering inflows” and it also helped the coin break above the $40K mark.The investment bank had earlier noted that the coin needed to break the resistance level at $40,000 to continue its earlier meteoric rise. And this would be achieved by greater inputs by institutions like Grayscale Investments that has invested over $20 billion in a Bitcoin Trust Fund.When the bank made its earlier statement, the coin was trading between $30,000 to $40,000. Since then, the value of the asset as reached a new all-time high and it current trades for $46,842.
