As the price of Bitcoin continues to soar, JPMorgan has changed its policy on virtual currencies in a way that no one expected. Specifically, the agency said in a recent note to clients that it “expects crypto price increases to not only be sustained, but to improve.”
This position contradicts comments from JPMorgan CEO Jamie Dimon. In fact, he has been vocal in his criticism of certain cryptocurrencies. Dimon specifically identifies Bitcoin as a “pet rock” while questioning its use cases and relevance as an asset class.
Also read: JPMorgan: 78% of institutional traders are not interested in cryptocurrencies.
JP Morgan optimistic about crypto amid market rally
Since the beginning of the week, the digital asset market has been surging. Leading the way is Bitcoin, which hit more than $57,000 on Tuesday, its highest level since November 2021. But that's not all, Ethereum has also surpassed $3,200, up 50% from last year.
Then, an institution known for opposing the asset class made a major U-turn. Specifically, J.P. Morgan recently spoke about the sustainability of cryptocurrencies amid Bitcoin's soaring price. The bank upgraded Coinbase's rating in a recent customer note originally obtained by CoinDesk. There, it is stated that digital asset value has the potential for further growth.
Also read: BRICS: JP Morgan CEO predicts major US financial crisis
“We believe this rise in Bitcoin is contributing to the improvement of the Spot Bitcoin ETF.” [exchange traded funds] That's driving the price of Bitcoin up and other tokens down,” said Kenneth Worthington, an analyst at JPMorgan. Looking ahead to the first quarter of 2024, “we expect rising crypto prices to not only maintain, but also improve, activity levels and Coinbase's profitability.”
This sentiment comes after the bank recently announced that 78% of its institutional traders are not interested in cryptocurrencies. Additionally, Jamie Dimon hasn't particularly held back on his critical perceptions of Bitcoin. He called digital assets “pet rocks”, citing their lack of practicality. Although he noted that blockchain technology has several use cases, he has consistently denied the viability of Bitcoin as an asset.
