The crypto space and market cap is a small percentage of the trillions invested through the global equities market or the amount that the United States Federal Reserve is able to print. While the promise of blockchain technology and the future of Bitcoin (BTC) has been realized through major traditional players unveiling their own versions of the technology, their hesitant investment advice does not seem to match their actions.
Real life application
Recently, Cointelegraph reported that wealth manager Adam Pokornicky had claimed he almost lost a client to the opinions of the top financial holding companies in the world. Adam said that the client, who was going to buy a minor amount of Bitcoin, decided not to proceed with the purchase because JPMorgan Chase and Goldman Sachs advised against it. The words that changed the client’s minds are unknown, but Adam was confident that they influenced the client’s choice.
While the banks’ motives are not immediately clear, long-term application of this suppression will allow banks to retain a certain degree of power as early adopters while their clients are instructed to wait. Benjamin Boyle, CEO of Caipiteal investment management firm, spoke to Cointelegraph about his own recommendations for cryptocurrency to his clients:
“An investment into cryptocurrency should be treated like investing in a startup or early stage company, therefore the company’s metrics should be analysed as if it was an equity investment. So if a client is looking to invest for the long term my suggestion is that the client employs advanced portfolio theory to manage their portfolio. In this case the client would decide to invest only a small portion of their total wealth into cryptocurrencies.”
Investment advisors taking a data-based approach could be doing a disservice to their client in advising against Bitcoin investment as a hedge to any stock portfolio. While investment advisors do typically warn of startup risks, Bitcoin has arguably grown beyond the classification of a startup. Therefore, as the interest in BTC continues to rise, investment advisors may stand in the way of their clients ultimately investing.
JPM Coin and many questions
JPMorgan, the biggest bank in the U.S., recently created and tested a JPM digital coin. This makes JPMorgan the first bank to create a digital coin representing fiat currency. While creating a stablecoin is not necessarily an investment instrument, it shows the industry’s willingness to embrace distributed ledger technology at its core. JPM Coin was created to ensure speedy cross-border payments and securities transactions between institutional clients of the bank.
By using the digital coin, the bank seeks to ensure secure transactions will be possible by the use of its Quorum Blockchain platform. This platform was created in 2016, and it is one of the pioneer partners of the Ethereum Enterprise Alliance.
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