JP Morgan Gives 3 Reasons to Add Bitcoin to Investment Portfolios

CRYPTONAIRE LYWEEK

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JP Morgan Gives 3 Reasons to Add Bitcoin to Investment Portfolios

JP Morgan has outlined three key reasons why investors should add bitcoin to their investment portfolios. Small allocations to cryptocurrencies would “improve portfolio efficiency due to high returns and moderate correlations,” JPMorgan’s analyst explained.

JP Morgan Sees Benefits of Hedging With Bitcoin

JPMorgan released a report last week entitled “What cryptocurrencies have and haven’t done for multi-asset portfolios.” Published by the firm’s head of Cross-Asset Strategy division, John Normand, the report explores cryptocurrencies’ use for portfolio diversification.

Before discussing the reasons to have BTC in portfolios, the report acknowledges that “Bitcoin has already achieved the fastest-ever price appreciation of any must-have asset to which it is often compared,” such as gold in 1970s, Japanese equities in 1980s, U.S. tech stocks in 1990s, Chinese equities in 2000s, commodities in 2000s, and FANG stocks in 2010s.

While noting that bitcoin is highly volatile, the analyst hypothetically asked: “Why bother considering an unconventional and high-volatility hedge?” He then answered his own question by giving three reasons.

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