JP Morgan strategists say Bitcoin becomes a cyclical asset, not a hedge

In a recent report, some JP Morgan strategists have stated that Bitcoin becomes a cyclical asset, not a hedge.

Bitcoin’s (BTC) bull market has put the flagship cryptocurrency on par with cyclical assets rather than a hedge against market stress, according to strategists at JP Morgan Chase.

JP Morgan strategists John Normand and Federico Manicardi say anyone betting on Bitcoin Blueprint as a portfolio diversifier is putting themselves at risk. In a Thursday report obtained by Bloomberg, the strategists called Bitcoin the „least reliable hedge during periods of acute market stress.“

JP Morgan strategists added:

„The integration of crypto ownership is increasing correlations with cyclical assets, potentially turning them from insurance to leverage.“

Cyclical assets generally refer to stocks that follow the trend of the broader economy. What this means is that their performance depends on the economic cycle.

These companies produce goods and services that are in demand when the economy is doing well. Consequently, these are some of the first items people give up when the economy weakens.

Is bitcoin bracing for a downturn?

Older investors are getting involved with BTC and cryptos, new survey finds

Older generations have begun to recognize the potential of cryptocurrencies and blockchain in global payment systems. According to a new survey.

On January 21, digital payment platform Wirex published a special report dedicated to the topic of cryptocurrency adoption in 2021.

The report includes survey results from 3,834 respondents in 89 countries. Aiming to understand the latest trends in the global adoption of blockchain-based digital payments.

The survey was conducted over the course of three weeks, with both Wirex and SDFs sending out emails requesting voluntary participation in a survey related to cross-border transaction usage. Total responses included 81% of European residents and 17% of participants from the Asia Pacific region.

Wirex and @StellarOrg are delighted to share our special report on The Future of Money

Over the past months, we’ve carried out surveys with our users to help understand spending habits, attitudes towards #crypto and use of the alternative currencies..
– Wirex (@wirexapp) January 21, 2021

Guggenheim CIO expects Bitcoin price to fall to USD 20,000

A senior executive at financial services company Guggenheim Partners, which plans to seek investment exposure to Bitcoin (BTC), has argued that BTC is about to fall to USD 20,000.

Scott Minerd, chief investment officer at Guggenheim, believes that Bitcoin will not reach another all-time high in 2021. According to a January 21 episode of CNBC’s Closing Bell.

After hitting USD 42,000 on January 8, Bitcoin is unlikely to rise further until 2022. Minerd said:

„I think for the time being, we’ve probably hit the Bitcoin price ceiling for the year. And we are likely to see a complete pullback towards the USD 20,000 level.“

Despite Minerd’s short-term bearish Bitcoin prediction, the CIO apparently still maintains the stance that a BTC will be worth up to USD 400,000 one day.

In late 2020, when Bitcoin was on track to reach a new all-time high, the CIO argued that the long-term price would reach USD 400,000.

It subsequently turned bearish in the short term, stating on January 10 that „Bitcoin’s parabolic rise is unsustainable in the near term.“

Of tech interest:

Tanla Platforms, a Microsoft and India-based cloud communications company, has launched a blockchain-based communications-as-a-service platform. Aimed at offering more private and secure messaging.

According to an announcement Thursday, Microsoft was the development partner and architect behind Wisely, which is aimed at enterprises, mobile operators, over-the-top content providers and more.