JPMorgan has been quite vocal on the matter of cryptocurrencies lately and has been reporting on the progression of the industry. This reporting makes sense because both firms are significant players in the finance world and they both are looking towards capitalizing and both have vested interests in maximizing the value of their stock. They are only able to maximize the value of their stock by making certain to take the correct actions in the short term and the long term to strategically place themselves in a position to win and profit from market movements. The firm has had its leaders look at the industry in harsher lights and then turn neutral and somewhat positive over the past couple of months.
The prominent chief operating officer of the Chase, Jamie Dimon, has stated that the pioneer cryptocurrency, Bitcoin, was a fraud that was used by criminals and those participating in illicit activities. As time progressed, he noted that he would not discuss the matter anymore and then later went to say that he was not fond of the comments that he made earlier on the matter. Furthermore, he stated at Davos that he shouldn’t be classified in the naysayer category.
The firm and it’s teams have continued to keep a close eye on the industry and have published reports following their views on the market.
So, what’s their take?
The J.P Morgan report
The report covers a variety of aspects in the field of cryptocurrencies, from the technology to the applications to the many challenges facing the industry.
J.P Morgan has stated that they see the emergence of cryptocurrency as a maelstrom of innovation and think that the industry will most likely not vanish into thin air, according to an executive summary of the J.P Morgan report shared by crypto community enthusiast, analyst, and writer, Joseph Young.
Overall, the prominent banking firm seems to see that cryptocurrencies have a bright future ahead.
They note cryptocurrencies are leading the blockchain innovation trend and is producing a sort of Facebook-esque move fast and break things mentality in the crypto world.
According to the report:
“Cryptocurrencies are the face of the innovative maelstrom around the Blockchain technology that is bringing both massive price volatility and a constant trial-and-error of new product try-outs and failures.”
The report then went into their thoughts and ideas on how cryptocurrencies could be utilized further.
Noting that it does not seem like they will be disappearing anytime soon and that they would not have too much of a difficult time in surviving in different formats. The appeal in regards to decentralization and direct peer to peer flow, coupled with anonymity and other aspects allows for greater utility and adoption by various markets.
“The underlying technology for CCs [cryptocurrencies] could have the greatest application in areas where current payment systems are slow, such as across borders, as payment, reward tokens or funding systems for other Blockchain innovations and the Internet of Things, as well as parts of the underground economy.”
An important note in regards to challenges was that the firm stated that it would be quite difficult for cryptocurrencies to displace and compete with current fiat currencies that are backed by governments. They state that dollars, euros, and yuan are “virtual natural monopolies” in their respective regions and will not easily give up their seigniorage profits.
Amidst this report, J.P Morgan is still cautious in regards to extending credit and has imposed severe restrictions in allowing their customers in using their credit to purchase cryptocurrencies.
They want to make sure that they will not be liable for losses and are acting accordingly.