June 14, 2021

JPMorgan: don't expect big companies to invest in bitcoin after Tesla

Tesla Motors' decision to buy bitcoins and start accepting them as payment for electric vehicles excited the cryptocurrency industry. However, specialists from the largest American financial holding JPMorgan do not think that other large firms will follow Tesla's example.

They believe Tesla's $ 1.5 purchase of Bitcoinbillion will not necessarily trigger a wave of such investments by large corporations. JPMorgan analysts, led by Nikolaos Panigirtzoglou, argue that Bitcoin's high volatility could deter cautious investors from investing in the popular cryptocurrency.

"The main problem with the idea that large corporations will follow Tesla's lead is the volatility of bitcoin," the note to investors said.

According to JPMorgan, even a small percentagebitcoin in portfolios of corporate clients will be associated with a high level of risk, since such companies usually maintain the volatility of their portfolio at around 1%. Even if 1% of the total allocation is invested in Bitcoin, it "will cause a serious increase in the volatility of the entire portfolio." For example, if Bitcoin's annual volatility is 80%, then portfolio volatility could rise to 8%.

But Elon Musk, it seems, is not scared.The eccentric billionaire has invested in bitcoin, and judging by the annual reports submitted to the US Securities and Exchange Commission (SEC), the firm did not skimp on spending an impressive amount of cryptocurrency. This news triggered another jump in the bull market, after which bitcoin reached another high of $ 48,000.

After this serious step, a series of cryptansexpressed confidence that almost every American company will follow Tesla's example. Grayscale Investments CEO Michael Sonnenshein said there will soon be other forward-thinking leaders of large corporations who realize the power of Bitcoin.

Some even ventured to speculate that the American tech giant Apple could become the next institutional player in the cryptocurrency market.

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