Friday, February 21, 2020

JPMorgan Says Bitcoin’s Use For Payments Will Remain Challenged

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Grace Joseph
Freelance Writer, Blogger, and Crypto Enthusiast. Studied Computer Science in University and Undergoing a Masters Degree Programme in Computer Engineering Contact@ reigngracia@gmail.com

According to Reuter’s report on January 24, JP Morgan, a New York-based investment bank and financial services company stated that the use of Bitcoin as a method of payment will remain challenged. The bank also said there has been a decline in crypto investments by financial institutions over the past six months due to Bitcoin’s falling rates.

JP Morgan, No Major Retailer Accepted Digital Coins in 2018

According to JP Morgan, the use of cryptocurrencies as a method of payment will remain challenged. The financial services company also said they are unable to pinpoint a major retailer that had adopted the virtual currency for payments in 2018. These virtual assets have more tendency to thrive in a marketplace that small businesses and individuals can control payments, they further stated.

JP Morgan reportedly said it is skeptical that Bitcoin will become a store of value. The bank added that the only time this digital asset will make any sense is when people have finally lost hope on gold, dollar, and other reserve assets. In the same vein, there will still be less-complicated instruments for making transactions even in extreme case scenarios like a recession.

Bitcoin’s Falling Rates Has Led to Decline in Investments

Furthermore, JP Morgan’s analysts outlined that due to Bitcoin’s falling rates which landed it at almost three-quarters of its value, financial institutions within the past six months have been reluctant to invest in crypto markets. The analysts outlined that it is also the case with Pension funds and asset managers who have steered clear entirely.

In their opinion, it is because of security flaws and the tendency for the digital asset to be used for illegal purposes. The company added that despite the advancements in market infrastructures which have brought about safer means of storing crypto assets, these flaws make these people unwilling to invest. However, individuals are currently the major investors.

JP Morgan also said:

Bitcoin, which stood at around $3,565 in afternoon trade, is likely to have cost support at around $2,400, and could fall below $1,260 if a bear market persists.

JP Morgan Points Out Blockchain’s Potential

While the bank is not receptive of cryptocurrencies, it, however, pointed out that blockchain could be useful in the aspect of trade finance. According to them, the distributed ledger technology can settle transactions swiftly without a central regulation. Therefore, the blockchain could help global banks to cut cost and also digitize their complex processes.

BTCNN on January 24, also reported of Jeff Schumacher, founder of BCG Digital Ventures opinion while in a debate with CNBC, a media outlet. According to Schumacher, the price of Bitcoin will fall to zero. On the other hand, other panelists in the interview predicted that the blockchain will gain massive adoption within a few years.

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