Even JP Morgan is Praising Crypto Amid Bitcoin Rally

It's never too late to be a crypto convert. In the past, BlackRock CEO Larry Fink had served as the poster child for crypto naysayers but today, his firm's Bitcoin ETF is the second largest in the market.

BlackRock's iShares Bitcoin Trust (IBIT) holds over $6.65 billion in AUM as Fink puts his anti-crypto days behind him. At the time of writing, IBIT hit its record volume of $1.3 for its second consecutive day.

The Flippening of Fink: From Crypto Critic to Blockchain Believer

He acknowledged the “pent up interest in crypto” and even went as far as to say that crypto could serve as a “flight to quality” amidst global turmoil. Hold up! Is this the same guy who once scoffed at the very idea of digital assets?

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Another staunch advocator for anything but crypto comes in the form of JP Morgan and its CEO, Jamie Dimon.

Last month, Dimon urged investors at the 2024 World Economic Forum in Davos to stay clear of crypto. "My personal advice is not to get involved in Bitcoin," Dimon said on the sidelines of the Davos meeting, adding that its use cases are “AML, fraud, tax avoidance, sex trafficking.” He then called the cryptocurrency a "pet rock" as it "does nothing."

JP Morgan CEO Jamie Dimon Brings Bitcoin FUD to Davos

While his counterparts have since embraced Bitcoin, Dimon reiterated his skepticism of of the cryptocurrency OG, highlighting its “limited legitimate use cases” and its association with illicit activities.

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JP Morgan's distaste for crypto isn't just anecdotal either. In its own survey, the global investment fund concluded that 78% of institutional traders at the banking giant have no plans to touch crypto in the next five years. But while this survey reflects JP Morgan's internal culture, it doesn't necessarily represent the broader market.

As Expected: Crypto Skepticism Reigns at JP Morgan, Despite Broader Market Sentiment

JP Morgans’ latest survey shows the majority of institutional traders avoid crypto, reflecting the bank’s CEO’s skepticism. However, a small but growing minority plan to enter the market, potentially influenced by recent positive developments.

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Converting the Unconverted

Despite JP Morgan's insistence on playing the devil's advocate of crypto, it now seems the investment powerhouse might be lowering its guard. On the back of crypto's monumental price surge over the past couple of weeks, JP Morgan has said, "We see the higher cryptocurrency prices not only sustaining but improving."

Over the past month, Bitcoin has seen a 36% increase, breaking the $50K mark, whilst Ethereum broke its $3K barrier after rising 44% through the same period.

JP Morgan even upgraded its rating on Coinbase to "neutral" from "underweight" amid the unignorable crypto bull market.

“We think this Bitcoin appreciation is contributing to better Spot Bitcoin ETF [exchange traded funds] flows, which is, in turn, driving Bitcoin prices higher and pulling other tokens as well,” JP Morgan analyst Kenneth Worthington stated.

JP Morgan analyst Nikolaos Panigirtzoglou believes much of the drive is caused by retail investors and whilst the firm only places a 50% chance of Ethereum ETFs being approved, it recognizes that it is yet another driver.

“The revival of the retail impulse in February perhaps reflects the anticipation of three main crypto catalysts over the coming months: the Bitcoin halving event, the next major upgrade of the Ethereum network and the prospect of approval of spot Ethereum ETFs by the Securities and Exchange Commission in May,” JP Morgan strategists said.

“We believe that the first two catalysts are largely priced in, while for the third catalyst, we see only a 50 per cent chance.”

Bitcoin Soars as ETF Momentum Builds

Bitcoin is back above a total market capitalization of over $1 trillion, and it’s 21% away from it’s all-time high.

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Convincing the Unconvinced

We've almost reached the two-month mark since spot Bitcoin ETFs were approved by the SEC. Initially off to a slow start, with some suspecting a sell-the-news movement garnering, Bitcoin ETFs have since powered on, in turn powering the entire crypto market.

As mentioned, BlackRock's IBIT has been breaking ground but its achievement is a true reflection of the insatiable appetite for Bitcoin ETFs.

Trading volumes for the nine key Bitcoin ETF products have eclipsed $2 billion daily. The daily record for the US spot ETF flows is $655 million, which was recorded on the first day. 13 February saw the second biggest at $631 million.

Their impact on Bitcoin's core price is a testament to the serious performance of crypto as a formidable asset class.

Nonetheless, the European Central Bank might still believe that Bitcoin is a harmful phenomenon with no inherent worth. "Bitcoin has failed on the promise to be a global decentralised digital currency and is still hardly used for legitimate transfers. The latest approval of an ETF doesn't change the fact that Bitcoin is not suitable as a means of payment or as an investment," noted the ECB officials.

However, its value proposition extends beyond traditional financial metrics and into the realm of digital asset innovation. It serves as a catalyst for rethinking money and financial sovereignty. 

What is the Fair Value of Bitcoin?

According to two staff members of the European Central Bank, Bitcoin is still a harmful phenomenon with no inherent worth, even if it has been approved as an asset to be included in ETFs in the US. The OG cryptocurrency just crossed its two-year high today, sitting at $56,287

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The strength of Bitcoin and its ETF products cannot be overstated, and it's still not too late to jump aboard the ETF train. Crypto exchange Kraken has introduced a new platform for institutions, asset managers, hedge funds, and high net-worth individuals amid the ETF hype.

Tim Ogilvie, the Global Head of Institutional at Kraken, directly pointed towards Bitcoin ETFs as a driver behind the platform.

"Institutional adoption of crypto is growing rapidly, and with the launch of Kraken Institutional, we're poised to grow with this client segment," he said. "The recent ETF approval has spurred broader institutional demand; with Kraken Institutional, Kraken is pulling together products and services to meet the needs of institutional clients."

What’s Next for Bitcoin ETFs - Approval of New Share-Class Listings?

Could the next driver for Bitcoin exchange-traded funds (ETF) be the $8.4 trillion business of novel structures for class-shares?

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