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JPMorgan Chase, United States’ largest investment bank, is advising its clients to invest 1% of their portfolio in cryptocurrencies such as Bitcoin (BTC). This is evident from a note in the hands of Bloomberg news agency that was published on February 25.
According to investment bank strategists, diversifying their portfolios is a good idea for investors. Cryptocurrencies like Bitcoin can serve as a hedge against fiat currency inflation.
JPMorgan Chase’s global head of research, Joyce Chang, and vice president of strategic research, Amy Ho, wrote in a note to clients Wednesday:
“In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio,”
Earlier this February, JPMorgan’s co-president Daniel Pinto stated that he is confident a convincing interest in cryptocurrency “will be (there) at some point.”
He said that:
“If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved.”
This can be seen as a change of heart while back in September 2017, Chief Executive Officer, Jamie Dimon still called cryptocurrency a fraud.
Although 1% may seem as a small percentage, it is as a sign that more and more banks and institutions are embracing the emerging crypto market.
For example, BNY Mellon, the oldest bank in the US and the largest custodian in the world, recently announced that it will launch cryptocurrency services.