JP Morgan are “pitching” Bitcoin to their wealthy investors, should we follow?

According to CoinDesk prominent US investment bank JP Morgan (JPM US) is now pitching Bitcoin to its wealthy clients although apparently its early days and investments haven’t yet started flowing through. The objective is to offer a fund which will allow clients the safest / cheapest Bitcoin investment vehicle although that’s an interesting turn of phrase when we consider the volatility in crypto land i.e. Bitcoin may have risen from under $US1,000 5-years ago to more than $US60,000 in April but it’s also shown the ability to half in response to adverse tweets from the likes of Tesla’s Elon Musk.

The trigger for JP Morgan and other financial institutions has been the demand side of the curve with increasing client interest due to a combination of staggering performance and general interest / publicity – were seeing this at MM. The bank has already added the likes of crypto exchange CoinDesk as clients last year while also launching JPM Coin to improve the efficiency of payments between corporate clients – they’ve most certainly embraced the new blockchain technology. While JPM haven’t commented on the latest claim of CoinDesk it certainly feels in character with recent years.

Twitter’s literally humming 24/7 with discussion around various crypto currencies and depending on the forum or press you’re reading its easy to love or hate this new asset class, there’re are certainly plenty of prominent detractors:

• Billionaire and visionary investor Hamish Douglass believes “Bitcoins going to zero!”.
• Warren Buffett has blasted Bitcoin as a “worthless delusion and rate poison squared”.

These two opinions alone should create a degree of trepidation in all but the most aggressive traders / believers. At MM we are starting to look at things a little more pragmatically as acceptance for Crypto generally grows but in our opinion risk / reward is key in this volatile new asset class,  a quick glance at the above 2 quotes should solidify why we believe any foray into crypto land must be accompanied by a stop i.e. quantify the risk and let the upside look after itself.