JPMorgan Not Sold on Tesla’s Bitcoin Acquisition, Believes It’s Still Too Volatile


Following Tesla’s recent $1.5 billion (15% of its net cash holdings) Bitcoin (BTC) acquisition, many cryptocurrency enthusiasts have asserted that several more companies could follow suit. Some speculated that Apple could be next, while Max Keiser noted that it could be Larry Ellison’s Oracle.

However, some JPMorgan analysts are holding onto a different opinion. According to Bloomberg, the banking giant admitted that the acquisition could place the spotlight on Bitcoin but noted that it was still too risky. The analysts stated that “the main issue with the idea that mainstream corporate treasurers will follow the example of Tesla is the volatility of Bitcoin.” Even making a small 1% allocation in BTC “would cause a big increase in the volatility of the overall portfolio.”

The analysts also noted that Bitcoin’s annualized volatility is currently at 80%, making it too volatile for even a 1% allocation from a corporate body.

That said, co-founder, and CEO, of MicroStrategy—Michael Saylor—begs to differ on JPM’s Bitcoin volatility narrative.

Saylor asserted that the COVID-19 pandemic “changed everything” in the financial sector. He noted that global powers—like the US—began increasing the supply of money by more than 15%, which he believes is a trend that will persist in the next 4-8 years.

That said, Saylor believes that cash is a “dilutive” asset considering that it is losing more than 15% of its purchasing power every year. He explained that if corporations converted their cash holdings to the “best performing asset, which is bitcoin,” it would be “really good for shareholder value.”

BTCUSD – Hourly Chart

Key BTC Levels to Watch — February 10

Bitcoin has recorded a significant retrace over the past few hours—as predicted—falling from the $47,500 resistance to the $44k support. The benchmark cryptocurrency appears to be in recovery from the recent dip and is hovering above the $45k area. However, we could still see a continuation of the retrace to the $43k support to perfect a rebound to the upper-$47k area.

Meanwhile, our key resistance levels are at $46,000, $47,500, and $48,200. While our key support levels are at $45,000, $44,000 and $43,000.

Total Market Capitalization: $1.38 trillion

Bitcoin Market Capitalization: $835 billion

Bitcoin Dominance: 60.2%

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.