- Volatility concerns have not stopped bitcoin from rising in value.
- Bitcoin’s price volatility levels are far greater than other asset classes.
JPMorgan equities research analyst Kenneth Worthington said in a note to clients Friday that the cryptocurrency markets and industry are ready for broader mainstream recognition this year. In contrast to many in the crypto industry, JPMorgan analysts projected that this year’s trademarks would be better interoperability of multiple blockchains and financial tokenization.
BREAKING: JP Morgan says #Bitcoin is “particularly well-designed as a modern store of value, and the strong design has contributed to the increased confidence in value of Bitcoin.”
— Dennis Porter (@Dennis_Porter_) January 7, 2022
For financial services, Worthington and Smith believe that the growth of the crypto markets will accelerate this year if the Ethereum blockchain or other layer-2 efforts can increase capacity and transaction speeds.
Modern Store of Value
Regarding bitcoin, JPMorgan said its:
“particularly well-designed as a modern store of value, and the strong design has contributed to the increased confidence in and value of Bitcoin.”
However, given its brief history, bitcoin still falls short when compared to other reserves of wealth, such as gold, according to Worthington. Additionally, bitcoin’s heightened volatility likely won’t make it a sound currency.
Adding further Worthington said bitcoin:
“could undermine crypto as a medium of exchange, as a unit of account and as a standard for deferred payments, the other recognized functions of money.”
Volatility concerns have not stopped bitcoin from rising in value; however, he added. Worthington, though, believes that Coinbase is still a “buy” for investors because of the expansion in the crypto sector. However, it is worth noting that bitcoin’s price volatility levels are far greater than other asset classes, including gold, the U.S. currency and stocks and commodities, mentioned Worthington & Smith.
