JPMorgan’s relationship with crypto has been a long and turbulent one. Back in 2017, Matt Dimon — the chief executive of JPMorgan — called it a fraud and said he would fire any of his employees investing in it.
“The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart. I would fire them in a second, for two reasons: It is against our rules and they are stupid, and both are dangerous.”
However, they’ve since softened their stance, allegedly going so far as to have meetings with high-level Coinbase management.
Memo On Crypto Risks and Benefits Sent Out
This February, a memo explaining crypto to clients was sent out by the JPMorgan Private Bank. The prestigious bank requires clients to have at least $10 million to deposit when opening an account, and it is the chosen business of many high-rollers worldwide.
Daniel Pinto — the co-president of JPMorgan — stated last month that although clients are not clamouring for crypto facilities just yet, they almost certainly will in the future. He reportedly added that he himself is personally open to more expansion into the crypto space.
The memo sent out to clients provides 3 ways that the real value of Bitcoin should be measured.
Primo — by applying Metcalfe’s law which gives the value of an asset as equal to the square of its users, Bitcoin should be valued at $21,667.
Secundo — If the going rate on gold would be transposed into the crypto space, Bitcoin should be worth $540,814.
But the highest value possibly assigned to Bitcoin comes from the third way of evaluating it.
Tertio — If the total amount of money is compared to the total supply of Bitcoin available, Bitcoin should be worth $1.9 million.
The takeaway seems to be that although cryptocurrencies are as volatile as always, big banks seem to agree that their future could be much brighter than it may seem even after a year where cryptocurrencies skyrocketed. However, caution is still advised — just in case Metcalfe is right.
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