Major American banks discourage their clients from investing in cryptosystems. A false front or a solid recommendation?
Crypto space and market capitalization is a small percentage of the trillions invested through the global stock market or the amount that the United States Federal Reserve is able to print. While the promise of the Blockchain technology and the future of Bitcoin (BTC) has been realized through traditional major players revealing their own versions of the technology, their hesitant investment advice does not seem to match their actions.
The real life application
Recently, Cointelegraph reported that wealth manager Adam Pokornicky had claimed he almost lost a client to the views of the world’s leading financial holdings. Adam said the client, who was going to buy a small amount of
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, decided not to proceed with the purchase because JPMorgan Chase and Goldman Sachs advised against it. The words that changed the client’s mind are unknown, but Adam was confident that they influenced the client’s choice.
A digital euro has just been successfully tested at the Bank of France
Although the reasons for the banks are not immediately clear, the long-term implementation of this abolition will allow the banks to retain a certain degree of power as early adopters while their customers are instructed to wait. Benjamin Boyle, CEO of the investment management firm Caipiteal, spoke to Cointelegraph about his own recommendations for crypto currencies to his clients:
„An investment in cryptomone should be treated as an investment in a start-up or start-up company, so the company’s metrics should be analyzed as if it were an equity investment. So if a client is looking to invest for the long term, my suggestion is that the client employ advanced portfolio theory to manage his portfolio. In this case the client would decide to invest only a small part of his total assets in cryptosystems.
Investment advisors who adopt a data-based approach could be doing their client a disservice by advising against investing in Bitcoin as a hedge for any stock portfolio. While investment advisors typically warn of the risks of a startup, it can be said that Bitcoin has grown beyond the classification of a startup. Therefore, as interest in BTC continues to grow, investment advisors may be hindering their clients‘ investments.
JPM Coin and many questions
JPMorgan, the largest bank in the US, recently created and tested a digital currency, the JPM. This makes JPMorgan the first bank to create a digital currency that represents fiat money. While the creation of a stablecoin is not necessarily an investment instrument, it shows the industry’s willingness to adopt distributed bookkeeping technology at its core. JPM Coin was created to ensure the speed of cross-border payments and securities transactions between the bank’s institutional customers.
By using digital currency, the bank seeks to ensure that secure transactions are possible through the use of its Quorum Blockchain platform. This platform was created in 2016, and is one of the pioneering partners of the Ethereum Enterprise Alliance.