Buying Bitcoin, JPMorgan Reveals the Facts of Investors Running from Gold

Bitcoin digital assets will increase by almost 103% throughout 2021. This upward trend in cryptocurrency has made one of the largest investment banks from Wall Street, JP Morgan, take a look at it.

JP Morgan started his research on Bitcoin. In a report, JP Morgan said that there was an outflow of US $ 20 billion from gold assets in the form of mutual funds that could be traded with underlying gold assets and there was an inflow of US $ 7 billion into digital assets in the form of crypto currencies such as Bitcoin in the form of funds with underlying cryptocurrency assets.

This shows that Bitcoin is not only growing in popularity but also being accepted. If a few years ago this cryptocurrency player was a retail investor, this time big money like institutional investors also entered the Bitcoin rally party.

Call it names like Paul Tudor and Elon Musk also enlivened the party. Tesla recently bought billions of dollars in Bitcoin and plans to accept payments in the form of digital coins.

Seeing the growing and expanding trend of the Wall Street giant bank provides a very bullish outlook for Bitcoin. For the long term, JP Morgan thinks Bitcoin can break through to US $ 130,000 / BTC.

Currently Bitcoin is still priced at US $ 58,000 / BTC. This means that there is an almost double upside potential if the price is reached.

JP Morgan has also started recommending its clients to buy Bitcoin even in small amounts. This is intended to diversify the portfolio from exposure to traditional financial assets such as stocks and bonds.

"In a multi-asset portfolio, investors are likely to add up to 1% of their allocation to cryptocurrency to achieve efficiency gains in overall risk-adjusted portfolio returns," strategists including Joyce Chang and Amy Ho wrote in a note.

One of the reasons why many recommend Bitcoin is because it is a relatively new asset and tends to be uncorrelated with other assets. This makes Bitcoin suitable for hedging.

Former US central bank economists Roberto Perli and Benson Durham consider that adding a number of digital assets to a portfolio can reduce the risk of stock price volatility.

However, JP Morgan also highlighted the weaknesses of this cryptocurrency digital asset. According to the Wall Street bank's strategic origin, crypto currency is an investment vehicle and not a currency for funding.

"So, when looking to hedge macro events with currencies, we recommend hedging through funding currencies such as the yen or US dollar instead.