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Tesla’s bet on Bitcoin should not be followed, says JPMorgan



Tesla’s billion dollar investment in Bitcoin will not be followed by other companies because it was a “too bold” bet.

That was what the bank JPMorgan Chase & Co said in a note released on Tuesday (9) by Bloomberg.

According to bank strategists, led by Nikolaos Panigirtzoglou, the BTC’s volatility will prevent massive adoption:


“The main problem with the idea that conventional corporate treasurers will follow Tesla’s example is BTC volatility,” they said in a statement.

On the other hand, strategists noted that the Tesla acquisition puts Bitcoin in the spotlight.

Will more companies adopt Bitcoin?

As CriptoFácil reported, on Monday the news surfaced that Tesla contributed $ 1.5 billion in Bitcoin.

In addition, the company said it plans to start accepting cryptocurrency as a form of payment.


The announcement boosted the price of Bitcoin, which topped $ 48,000 on Tuesday (9). However, the initiative also generated a debate about a possible ripple effect. That is, whether other CEOs and CFOs will make similar investments.

JPMorgan experts explained that corporate treasury portfolios are usually stuffed with bank deposits, money market funds and short-term securities.

And that means that annualized volatility, that is, price fluctuations over the course of a year, is around 1%.


Thus, they noted that adding a Bitcoin allocation of 1% “would cause a huge increase in the volatility of the overall portfolio”.

They said that such an allocation could increase volatility to 8% due to Bitcoin’s 80% annualized volatility.

“Regardless of how many companies eventually follow Tesla’s lead, there is no doubt that this week’s announcement abruptly changed the short-term trajectory for Bitcoin, increasing inflows and helping BTC to exceed $ 40,000,” wrote the JPMorgan strategists.

Market disagrees

But not the entire market agrees with the bank’s strategists.


Executive Mike Novogratz, for example, said that “all companies in America” ​​will accept Bitcoin as payment.

In addition, Twitter’s chief financial officer, Ned Segal, revealed that the social network is considering adding Bitcoin to its balance sheet.

Segal also did not disregard the possibility of paying employees and suppliers with the cryptocurrency if there is demand.


Also read: What’s missing for Bitcoin to reach $ 1 trillion in market value?

Read also: Bitcoin’s next resistance is at R $ 270,000, predicts Bitcoin Market

Read also: 10 years ago, “consolation prize” of electronic game was 25 Bitcoins


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