Given the current macro environment, investment banking giant JPMorgan Chase is increasingly looking for alternative investments. Bitcoin and other cryptocurrencies are proving to be favorites alongside hedge funds, with the big bank downgrading real estate.
In a letter to investors she expressed JPMorgan when they convert to alternative asset classes. The big bank is now classifying digital assets as undervalued and in the future one should be more careful with private equity, private debt and real estate. According to analyst ratings, Bitcoin (BTC) has a fair rating of $38,000 despite the bearish sentiment that followed Terra Luna disaster and general macroeconomic turmoil.
Giving up due to external factors
Analysts at JPMorgan are unimpressed by the recent downtrend. In addition to the collapse of the largest algorithmic stablecoin and its $60 billion ecosystem, the market also dealt with The conflict between Russia and Ukraine and the rising interest rates of the US Federal Reserve. These were all external effects that, according to the investment banking giant, pushed the price below intrinsic value.
“The cryptocurrency market correction over the past month looks a lot more like a capitulation compared to January/February last year, and we are seeing a rally in the bitcoin and cryptocurrency markets in general.” – JPMorgan strategists led by Nikolaos Panijirzoglou
How well the cryptocurrency market recovers depends on one crucial factor; Venture capital (VC) financing. JPMorgan supposed In continuation of multi-billion dollar venture capital funding, this is why the long “crypto winter” of 2018/2019 should not be repeated. According to the strategists, there will be few signs that this trend is slowing, as evidenced by the latest $4.5 billion venture capital a16z. This will need to secure a floor for the crypto market that has not existed in previous cycles.
Digital assets as an alternative asset class
Due to the challenging macroeconomic environment, JPMorgan is currently focusing heavily on alternative investments; Investments that are not invested in stocks, bonds, or cash. Due to rising mortgage rates, the major bank downgraded real estate for the coming quarter, calling cryptocurrencies and hedge funds among the “most attractive alternative investments.”
In doing so, JPMorgan is continuing the trend of institutional adoption in the US, exemplified by the involvement of other financial services firms such as Goldman Sachs, Citibank, and Fidelity Investments. JPMorgan itself has been letting customers in since July 2021 Invest in crypto funds And the I entered in February This year as one of the first banking giants Metaverse.