JPMorgan analysts have suggested that large companies will not follow Tesla’s lead and invest in Bitcoin due to the asset’s high volatility, Bloomberg reports.
According to the bank’s strategist Nikolaos Panigirtzoglou, usually, corporate portfolios consist of bank deposits and short-term bonds, which show annual fluctuations of about 1%.
JPMorgan is confident that the addition of bitcoin “would cause a big increase in the volatility of the overall portfolio.”
“Irrespective of how many corporates eventually follow Tesla’s example, there is no doubt that this week’s announcement changed abruptly the near-term trajectory for Bitcoin by bolstering inflows and by helping Bitcoin to break out above $40k. The sustainability of the rally will depend on less speculative institutional investments,” Panigirtzoglou said.
On February 8, it became known that Tesla invested $ 1.5 billion in bitcoin, after that the price of the asset began to rise sharply and in less than a day crossed the $ 48,000 mark.
The former head of the Treasury’s Office of the Comptroller of the Currency (OCC), Brian Brooks, called Tesla’s investment in bitcoin exciting and daunting at the same time.
Gary Black, former investment director of Goldman Sachs, sold Tesla shares after the company converted some of its reserve funds into digital gold.