“$1.5 Trillion could flow into Bitcoin”, according to JMP’s Devin Ryan

San Francisco-based financial services and NYSE listed firm JMP Securities LLC. released a note to its clients in which it predicts that “1.5 trillion of incremental capital” could soon flow into bitcoin, an amount two and a half times its current market cap. The firm with offices all over the U.S. expects more firms to follow Morgan Stanley’s move to offer its clients exposure to bitcoin and believe their move was only the “tip of the iceberg”.

In a note to their clients, Devin Ryan, managing director and equity research analyst, said that “Around $30 trillion of assets in the U.S. retail wealth management industry currently do not have direct access to bitcoin,” and that Morgan Stanley’s move could very well serve as a catalyst for others elaborating:

“Making some assumptions, with relatively modest asset allocation exposure of 5% of a portfolio, this alone would represent $1.5 trillion of incremental capital into bitcoin, which is greater than its current market cap.”

The analyst noted that “Around $30 trillion of assets in the U.S. retail wealth management industry currently do not have direct access to bitcoin,” elaborating:

Making some assumptions, with relatively modest asset allocation exposure of 5% of a portfolio, this alone would represent $1.5 trillion of incremental capital into bitcoin, which is greater than its current market cap.

A 5% allocation to bitcoin is not an uncommon position and has been recommended by numerous investors and advisors that believe 5% (or more) in the mix is optimal.

Ryan believes that the industry is still in the “very early innings of adoption” with the signposts progressing logically and as anticipated and he predicts wealth managers outside the U.S. to pick up on the trend, all fueled by the same drivers however dynamics will vary per region:

“Motivations range from missing the opportunity at best, or at worst, seeing business disruption if clients decide better alternatives exist, which could negatively impact growth or competitive positioning,” he said.

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