Per a report published by Bloomberg earlier today, on Wednesday (February 24), Joyce Chang, Global Head of Research at J.P. Morgan, talked about cryptocurrencies in a note to clients.<\/p>\n
Her bio at the Asian American Business Roundtable\u2019s website says that from 1997 through 2012, Chang \u201cheld top rankings in Institutional Investor\u2019s Fixed-Income Research surveys for Emerging Markets research, including the distinction of earning 25 #1 individual rankings,\u201d and in 2014, she was \u201cinducted into the Fixed Income Analyst Society Hall of Fame.\u201d Before joining J.P. Morgan in 1999, Chang was \u201ca Managing Director for a decade at Merrill Lynch and Salomon Brothers.\u201d<\/p>\n
Bloomberg says that with regard to the role of crypto as part of a balanced portfolio, Chang wrote:<\/p>\n
\u201cIn a\u00a0multi-asset portfolio, investors can likely add\u00a0up to\u00a01% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio.<\/em>\u201c<\/p>\n Annabelle Huang, a partner at Amber Group, a leading crypto finance service provider, told Bloomberg:<\/p>\n \u201cThrough the insatiable buy-side pressure from exchange-traded fund issuers, close-ended funds and large public corporations adding Bitcoin to their positions, demand is massively outstripping supply.<\/em>\u201c<\/p>\n One word of caution offered by the JP. Morgan report was this one:<\/p>\n \u201cCryptocurrencies are investment vehicles and not funding currencies. So when looking to hedge a macro event with a currency, we recommend a hedge through funding currencies like the yen or U.S. dollar instead.<\/em>\u201c<\/p>\n On February 16, a team of J.P. Morgan global market strategists led by\u00a0Nikolaos Panigirtzoglou wrote about Bitcoin in the weekly publication \u201cFlows & Liquidity\u201d, which is one of J.P. Morgan\u2019s flagship publications.<\/p>\n Dr. Panigirtzoglou is a Managing Director at\u00a0J.P. Morgan\u00a0who works on Global Market Strategy. Before joining J.P. Morgan in 2004, he worked as a Financial Economist at the Bank of England. Dr. Panigirtzoglou holds a PhD in Finance from Queen Mary University of London, an MSc in Economics from London School of Economics, and MSc in Economics and Finance from Warwick Business School.<\/p>\n With regard to Bitcoin, the J.P. Morgan strategists wrote:<\/p>\n \u201cSince the end of September the market cap of bitcoin has grown by $700bn, from $200bn on Sep 30th to $900bn currently\u2026 What has been remarkable over the past five months is that the $700bn increase in the market cap of bitcoin has taken place with relatively little institutional flows\u2026<\/em><\/p>\n \u201cHow is it possible that such a limited flow would result in the magnitude of the increase in bitcoin market cap? One possibility is that, given the increase in interest from real money investors, and speculative investors seeking to frontrun it, this limited flow is hitting a relatively inelastic supply of a predetermined increase in new bitcoins mined and having to offer a premium to get existing holders to part with their bitcoin holdings. A second possibility is that retail inflows have significantly magnified the institutional flow.<\/em>\u201c<\/p>\n Back on January 4, according to Bloomberg, the same team of global market strategists, offered this long-term price target for Bitcoin:<\/p>\n