According to analysts JPMorgan Chase, the current stage of market growth is cryptocurrented Bitcoin in one row with cyclic assets. That is, now BTC can hardly be considered a tool for hedging - that is, reducing risks - during crises. Experts John Normand and Federico Manikardi declare that anyone who bets on Bitcoin as a diversifier of the investment portfolio exposes its danger. They called the cryptocurrency "least reliable way to hedge in periods of acute market stress." We tell about the situation more.
To start an explanation. Bitcoin is traditionally considered a good tool to reduce the risks of lovers of classical investment tools. Since the maximum amount of BTC coins is recorded, and their release occurs in accordance with strict rules - which is noticeably distinguished by cryptocurrency from conventional currencies - most often changes in price coins do not depend on what is happening in the world. Moreover, Bitcoin's connection with shares and various indices is often negative, that is, cryptocurrency may well be profitable until everything else falls.
In this regard, the bitcoin and some major cryptocurrencies consolidated the reputation of excellent asylum values and tools to reduce investors' risks. Although JP Morgan representatives disagree with this. We tell about what analysts told.
Should I buy Bitcoin?
Here is a quote from the report of analysts in which they are divided by the results of the study. A replica leads cointelegraph.
Cyclic assets are usually called shares that follow the trends in the economy as a whole, which means that their effectiveness depends on the business cycle. These companies produce goods and in demand services when the economy "feels" well. Consequently, it is one of the first things from which people refuse when the economy is weakening. The concept of cyclic shares includes securities of companies of restaurant, hotel, aviation, furniture, automotive and other sectors.
And therefore, experts believe that Bitcoin can be a good choice for investors within a certain period of time. We are confident that the same can be said about all stocks, because the stock market is also developing in accordance with the growth cycles.
Apparently, speaking against the installation that Bitcoin is "digital gold", analysts still recognized that cryptocurrency can be a suitable investment for investors concerned about the political shocks and systemic devaluation of ordinary currencies. That is, if the growth stage of Bitcoin or other coins coincides with the problems in the economy and the world as a whole, it means that they can safecast investors from possible problems.
It should be noted that the representatives of JP Morgan have been expressed for the prospects for Bitcoin for the first time, and sometimes their statements contradict each other. For example, in December last year, analysts of the bank made that cryptocurrency is able to overtake gold on market capitalization. This should contribute to the fact that large investors are increasingly paying attention to BTC, taking into account its current growth.
A sharp increase in the inflation of the dollar against the background of the coronavirus pandemic made Bitcoin one of the most profitable investments last year. The cryptocurrency dropped to 5 thousand against the background of the March fall of the markets, but as a result was able to not only get to his historical maximum of December 2017, but also to double it. Recall, the new record of the Bitcoin course is now just below 42 thousand dollars. However, this mark of cryptocurrency has not yet overcame.
Anyway, throughout its history, the main cryptocurrency demonstrates huge profitability. We believe that this fact cannot be ignored by all investors - and especially those who have not yet managed to contact cryptocurrency and understand the blockchain device.
In the meantime, the conclusions of analysts cause bewilderment. They recognized Bitcoin with a cyclical asset, that is, such a course of which is subject to shifts of long-term growth and fall. However, this is happening everywhere - the same shares are also experiencing the stages of bullish and bear trends. So, in essence, there is nothing wrong with the behavior of BTC, because it is a healthy situation for any asset.
So while it is disappointed in cryptocurrentes there is no point. Especially taking into account the profitability that many of them brought in recent months.
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