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JPMorgan – Tesla’s Bitcoin Investment Won’t Be Followed by Others

February 10, 2021 at 15:51 by Mark Stevenson

In the near future, one should not expect a new influx of investments in Bitcoin like Tesla. Strategists of JPMorgan bank wrote about this in the mailing list to clients, reports Bloomberg.

Bitcoin volatility prevents the entry of large players

According to the bank, volatility will be a stumbling block for other companies wanting to copy Tesla’s strategy. “Bitcoin volatility is a major concern for the arrival of traditional corporate savings, following the example of Tesla,” wrote the bank’s strategists.

At the same time, JPMorgan believes that the transfer of only 1% of corporate capital to Bitcoin “will significantly increase the volatility of the entire portfolio.”

Related: JPMorgan Strategists Say Bitcoin Could Drop Unless It Breaks Above $40,000

However, the bank admits that the investment of Elon Musk’s company has made adjustments to the short-term trajectory of the leading cryptocurrency. How sustainable the rally becomes depends on whether “less speculative” institutional flows materialize.

Thus, JPMorgan analysts are referring to their past thesis. They argued that the correction depends on capital inflows into the Grayscale Bitcoin Trust (GBTC). Recall, according to JPMorgan, the capital inflow into the crypto fund is large enough to “create a stable negative price dynamics” in the market.

At the time of this writing, the volume of Bitcoin managed by Grayscale is 650,000 BTC. That’s almost $31 billion at the current exchange rate.

Read also: Will Bitcoin Price Rally to $146,000? JPMorgan Thinks So

As a reminder, JPMorgan’s comments were preceded by the news of Tesla’s historic Bitcoin investment. The world’s leading electric car manufacturer has invested $1.5 billion in Bitcoin. In addition, Elon Musk’s company also announced that it may start accepting Bitcoin as payment for goods and services in the future.

Such a high-profile decision immediately prices an all-time high of $43,960.00 per coin at 12:10 GMT on Monday. At the time of writing, the price of Bitcoin is trading at $44, 157.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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