09.12.2021

JPMorgan: Reducing BTC Volatility Will Become A Driver For Institutional Investment

According to researchers from JP Morgan Chase & Co., in the near future, demand for bitcoin from large banking organizations and institutional investors may resume.

The financial holding specialists came to the conclusion that the level of BTC volatility has been decreasing in recent weeks, which may become the main driver of institutional investments.

Analysts representing the giant US multinational investment bank, led by Nikolaos Panigirtsoglou, are increasingly sharing data related to BTC. They not only compare the performance of bitcoin and gold, but also highlight the well-known high volatility of the cryptocurrency.

In the past, researchers criticized the asset for its significant fluctuations, which could amount to tens of percent during the day. They have now admitted that the top cryptocurrency has stabilized lately, which could mean the arrival of banks and the return of institutions.

“These preliminary signs of a normalization in bitcoin volatility are encouraging. We believe that if this continues, in the long term it will help to revive institutional interest, ”Bloomberg reported.

They pointed out that the three-month realized volatility of the first ever crypto asset fell to 86%, while in February it was above 90%. In addition, the six-month realized volatility declined to around 73%.

Thus, banking organizations looking to stay away from highly volatile assets can start interacting with the cryptocurrency space.

While some US-based organizations BlackRock and MassMutual flirted with BTC, US banks were somewhat distant. Some of them, like Goldman Sachs, openly show their disdain for the merits of BTC.

Nevertheless, the situation is changing, and Morgan Stanley becomes the initiator of a new trend. Within two months, the bank added a service that allows its institutional clients to buy BTC through three funds. The company also plans to acquire a stake in the Bithumb cryptocurrency exchange, and 12 funds of the organization have received the right to invest up to 25% of the capital in bitcoin.

Just a few months ago, Goldman Sachs said Bitcoin was not an asset class and openly criticized the entire industry. However, the giant bank has filed with the SEC for Bitcoin ETF approval and announced plans to launch Bitcoin services for wealth management clients later this year.

JPM is also famous for its controversial history with BTC, as CEO Jamie Dimon called the asset a “scam” several years ago and then publicly apologized. Now JPMorgan has announced the launch of a basket of stocks in cryptocurrency-related companies.

America’s oldest bank, BNY Mellon, also demonstrated a crypto-friendly approach by launching a new custodian product in the form of BTC storage services.

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