JP Morgan: Put 1% In Bitcoin as a Hedge as Demand is ‘Massively Outstripping’ Supply

JPM Suggest: Put 1% in BTC

among the most popular topics of discussion within the community is how big should be the percentage investors allocate to bitcoin. The narrative ranges from BTC maximalists saying that all eggs should be in one bitcoin basket to others advocating for a broader diversification.

However, very few outsiders of the crypto community had ever suggested any BTC exposure until last year. Perhaps the first one to go public with it was the legendary legacy investor Paul Tudor Jones III following the COVID-19-induced market crash.

Since then, more representatives of the traditional financial field have joined, and the latest ones are strategists from JPMorgan.

Cited by Bloomberg, they seemed somewhat cautious but still indicated that investors should look into BTC for a possible hedge.

“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.”

However, the analysts advised investors to explore other fiat currencies, such

as the yen or the dollar, if they want to hedge a macro event and not cryptocurrencies as they are “investment vehicles and not funding currencies.”

Wall Street hasn’t been a big booster of Bitcoin so far, but the ice seems to be melting. JPMorgan has—very cautiously—recommended investors consider adding the cryptocurrency to their portfolio.

“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,” the investment firm said in a note Wednesday.

Bitcoin’s volatility has made many investors wary over the past few months. Year to date, it has jumped from $29,333 to $49,902 as of 12:40 p.m. ET on Thursday. At its peak, it had reached as high as $57,000. Last week, its market cap topped $1 trillion.

JP Morgan Bets on Bitcoin

Traditional analysts are now suggesting that investors can add BTC to their portfolios. In a recent note, strategists at JP Morgan said:

“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.”

Its place serves as an uncorrelated hedge to the broader market, the strategists said.

How To Buy Bitcoin

There are a number of ways to buy BTC. However, many find that it is easiest to purchase it through a trusted global exchange like Coinrise.

Aside from offering the lowest fees in the industry, Coinrise is constantly rated one of the most secure and trusted crypto exchanges in the world. This matters because if you lose the private key to your BTC, it can be challenging if not impossible to recover your funds.

Coinrise takes security seriously, with tested technology and rigorous procedures designed to safeguard funds.