JPMorgan report suggests Bitcoin could outperform equities, government bonds and real estate – Stockhead
“May I be excused from this Bitcoin love-in?” JPMorgan CEO Jamie Dimon. (Getty Images)
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Shhh… don’t tell JPMorgan CEO Jamie Dimon, but judging by a circulating report, some of the Bitcoin sceptic’s analysts seem to think the leading crypto has a higher capacity for returns than any other risk asset.
In fact, to be precise, the exclusive report from the investment banking titan suggests Bitcoin’s projected “excess return” sits at 38.1% – significantly higher than other assets.
Excess return, according to Investopedia, is a “metric that helps an investor to gauge performance in comparison to other investment alternatives”. It’s complicated and is calculated using a formula that, again, is best described by Investopedia, but it’s essentially a forecasted value that’s greater than the projected rate of return expected (or priced in) by most investors and analysts in the market.
In any case, per the JPMorgan analysis, Bitcoin looks like it has potential to outperform other markets, which is an idea that seems to be building just lately. Bloomberg analyst Mike McGlone and even billionaire investor Stanley Druckenmiller have shared sentiment this week that definitely aligns with the JPM data.
The report, of which we’ve only seen a tweeted excerpt (see below) was referenced by The Crypto Basic website, and by Ryan Selkis this week. Selkis is the CEO and founder of crypto intelligence products provider Messari.
Bitcoin is the TINA trade of the next few years.
Highest projected excess return asset class according to…<checks notes>…JPMorgan. pic.twitter.com/5YHAA8quec
— Ryan Selkis 🥷 (@twobitidiot) September 28, 2022
Incidentally, by “TINA trade”, Selkis means “There Is No Alternative”.
As you can see from his grainy shot of the report, JPMorgan also sources Bloomberg Finance and financial analysis data-access providers Refinitiv Eikon.
Per the data, Bitcoin’s 38.1% excess return is streets ahead of the next highest asset class on the list – private equity (21%), which is followed by global equities (20.1%) and hedge funds (10.4%). Real estate and global government bonds are both well down the JPMorgan list in comparison.
Bitcoin’s benchmark weight is also the lowest on this list at 0.1%, although it has a massive volatility stat of 83.6%, which should probably be of no surprise to long-term crypto investors used to Bitcoin and crypto’s gut-churning, roller-coasting price swings.
At odds with the analysts’ report is JPMorgan CEO Jamie Dimon’s generally extremely negative stance on Bitcoin.
He’s made his distain for the crypto asset clear on several an occasion – the latest (that we’re aware of at least) being his “Bitcoin’s a Ponzi” swipe while sitting on a panel of fellow big bankers at the House Financial Services Committee meeting a bit over a week ago.
"I'm a major skeptic on crypto tokens which you call currency, like Bitcoin. They are decentralized Ponzi schemes." Jamie Dimon, JP Morgan CEO
I am confused. JP Morgan approved Bitcoin+crypto funds to sell to their clients and have a large crypto team. 🤔
pic.twitter.com/1tNJmSfoxg
— Gabor Gurbacs (@gaborgurbacs) September 22, 2022
However, according to Kevin O’Leary, a prominent Canadian venture capitalist investor and host of US show Shark Tank, Dimon feels threatened by decentralised cryptos, such as Bitcoin.
As reported by Cointelegraph, O’Leary was speaking on a panel at the Converge22 event in San Francisco this week, which is being hosted by Circle, the issuer of one of the industry’s leading stablecoins, USDC.
JPMorgan Chase’s CEO Jamie Dimon feels “threatened” by crypto and its power to disrupt the traditional financial world, indicated the Shark Tank host and converted Bitcoin and crypto fan.
Speaking about how banks profit on transaction fees, and how stablecoins in particular have the capacity to lower such costs, O’Leary said:
“This isn’t about speculation on asset price. This is about reducing the fees of how the world’s economies work. More transparent, more productive, completely auditable, regulated, but less expensive.
“So, does Jamie Dimon feel threatened? You are damn right he does. That is a big part of how he makes money.”
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