Tag: Jp Morgan

JP Morgan Executive Warns of Banking Collapse

by Blockchain News

In a recent interview with Bloomberg Television, Bob Michele, the chief investment officer of JP Morgan Asset Management, expressed concern over the future of regional banks in the United States. Michele was particularly worried about how these banks will operate once the Federal Deposit Insurance Corporation (FDIC) and Federal Home Loan Banks (FHLB) emergency lending programs expire.

Michele’s concerns stem from the recent liquidity issues faced by First Republic Bank, which has experienced significant deposit outflows. According to Michele, the impact of these liquidity issues is not limited to First Republic Bank alone but could potentially affect the entire banking industry in the United States.

While the FDIC and FHLB programs were created to help regional banks during times of crisis, their expiration could have devastating consequences for these institutions. Michele warned that the possible collapse of First Republic Bank could cause a domino effect that could lead to the collapse of other regional banks.

Michele’s comments highlight the importance of emergency lending programs for regional banks in the United States. These programs help provide liquidity to banks during times of financial stress, ensuring that they can continue to operate and meet the needs of their customers.

However, Michele’s comments also reveal a deeper concern about the stability of the banking industry as a whole. With the recent rise of fintech companies and the growing popularity of digital banking, traditional banks are facing increasing competition. In this context, the potential collapse of regional banks could have serious consequences for the entire financial system.

To address these concerns, it is crucial for policymakers to take a proactive approach to ensure the stability of the banking industry. This could involve extending emergency lending programs or creating new programs to provide support to regional banks. It could also involve implementing regulatory measures to address the potential risks posed by fintech companies and digital banking.

In conclusion, Bob Michele’s comments highlight the fragility of the banking industry in the United States and the importance of emergency lending programs for regional banks. While the potential collapse of First Republic Bank may not necessarily lead to a widespread collapse of the banking industry, it does underscore the need for policymakers to take proactive steps to ensure the stability of the financial system.

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JPMorgan Increases Long-Term Bitcoin Price Prediction to $150,000

by CryptoPotato

According to JPMorgan Chase strategists led by Nikolaos Panigirtzoglou, Bitcoin’s “fair value” should be 12% lower than its actual price.

In their opinion, the cryptocurrency is currently overpriced and its fair value should be around $38,000. The figure is based on the premise that BTC is around four times more volatile than gold, according to Bloomberg.

If this volatility narrowed to three times, the fair value price would increase to around $50,000, stated the strategists who wrote:

“The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,”

Predicting Bitcoin Prices

A more interesting observation from the letter to investors this week is that JPMorgan has increased its long-term price prediction for BTC. A year ago, the strategists suggested the long-term price for Bitcoin was $146,000, but they have upped this to a new prediction of $150,000. They did not provide a definition or time scale of “long term,” however.

The new price prediction is a level that would put the BTC total market value on par with that of all gold held privately for investment purposes, they added.

The analysts also commented that January’s market pullback did not look like the same capitulation event that occurred in May 2021. Last month, Bitcoin prices declined by 22%, from almost $47K to around $36.5K.

However, they also noted that metrics such as futures open interest (OI) and BTC reserves on exchanges are now pointing to a “more long-standing and thus more worrisome position reduction trend.”

Even though the report is generally bearish, it is a testament to how far crypto assets have come that major Wall Street banks (that previously hated them) are now advising investors about them and predicting prices.

BTC Price Outlook

At the time of writing, Bitcoin was changing hands for $43,900 with little change over the past 24 hours. The asset hit an intraday high of $44,758 a few hours ago but has started to fall back during the Thursday morning Asian trading session.

There is strong resistance at current levels, although prices have increased by 18% over the past seven days. A break above this resistance will result in more around the $47K zone. However, if the bears regain control, BTC could fall back to support at $41.5K.

Bitcoin is currently trading down 36.7% from its Nov. 10 all-time high of $69K.

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Shadow Crypto De-Banking: JPMorgan Closes Uniswap Founder’s Accounts

by CryptoPotato

That is precisely what has just happened to Uniswap founder Hayden Adams according to a Jan. 23 tweet. Adams revealed that JPMorgan Chase had closed his bank accounts with “no notice or explanation.”

He added that he knew of “many individuals and companies who have been similarly targeted simply for working in the crypto industry” before exclaiming, “thanks for making it a personal.”


Shadow De-banking of Crypto

This would be the perfect way for banks to crack down on crypto without all the public fanfare. This was suggested by former Commodity Futures Trading Commission (CFTC) Commissioner Brian Quintenz, who responded to Hayden’s quest for clarity from the bank.

“Likely a shadow de-banking of crypto by @federalreserve or @USOCC [Office of the Comptroller of the Currency] bank examiners, with direction from the top.”

Quintenz added that “if the examiner told a bank that a certain customer is too risky and the bank ended that relationship, the bank is contractually prevented from telling that customer why.”

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He cited a Nov. 20 Wall Street Journal article by pro-crypto senator Cynthia Lummis to hammer home the point. In it, Lummis claimed that the new chiefs at the Federal Reserve were purposely holding back fintech and crypto innovation, especially in her represented state of Wyoming, where special-purpose depository institutions (SPDIs) have previously been granted a green light to operate as fully regulated crypto banks.

There were several replies to Hayden’s complaint, many of which stated that they have also been blocked by banks or had accounts closed for dealings with crypto.

Chase support did actually respond to the tweet also, asking the Uniswap founder to use their support messaging system to clear up the “less than ideal experience” he has had with the bank.

Democratic Candidate for Congress, Matt West, commented:

“Absolutely insane. This is part of why we need clear regulatory framework in the US re: crypto and banks.”

CEO of JPMorgan’s digital asset unit said crypto is “here to stay” last week, but maybe not for some of its customers, it seems.

Banking Bunkum

It is not just U.S. banks that are coming down on crypto investors. Last year, CryptoPotato reported that an Australian investor sued Westpac and the ANZ bank for closing his accounts resulting in the loss of funds at the time.

Banks now have the perfect weapon against crypto, as this shadowy action can be used to discreetly expel customers without the bank having to justify those actions.

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Bitcoin Is Here to Stay: JPMorgan Exec

by CryptoPotato

Umar Farooq – Chief Executive Officer of JPMorgan’s digital asset unit Onyx – put his name next to those who believe the cryptocurrency industry is “here to stay.” He also opined that bitcoin has started evolving since it was “kind of rolling along slowly” during its first years of existence.

Crypto Nowadays Is Like Napster in The 90s

Speaking of cryptocurrencies and their merits, Mr. Farooq seems to have an entirely opposite opinion than Jamie Dimon – the Chief Executive Officer at JPMorgan & Chase. Unlike the CEO, the former thinks that digital assets are not a temporary trend that is going away. He is just not aware in what shape or form they will exist in the near future.

Farooq compared the current evolution of the space with the audio streaming service provider Napster. Many consider that the software, which was operating in the 90s, was the stepping stone for giant companies like Apple Music and Spotify:

“And then 20 years later, you have Apple Music and Spotify. I don’t think we would have gotten here without Napster. We are sitting in the Napster age. We just don’t know what Spotify looks like.”

Onyx’s Chief Executive touched upon bitcoin, too. In his view, the primary digital asset has been in a cognitive mode during its first 13 years of existence. However, the tides have turned recently, and now more people realize BTC’s merits:

“Bitcoin has been around for a little more than a decade now. The first few years was literally just, you know, kind of rolling along slowly, then things started to catch up.”

Umar Farooq
Umar Farooq, Source: Euromoney

JPM Coin’s Expansion

Nearly two years ago, the US multinational bank said it would roll out a digital payments system called JPM Coin, while the blockchain unit controlling the project is the aforementioned Onyx.

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Last week, the Central Bank of Bahrain (CBB) successfully completed a test of JPMorgan’s digital currency. This was the first trial of its kind for the blockchain product in that part of the world.

The experiment involved two other entities: Manama-based Bank ABC and Aluminium Bahrain – the first aluminum smelter in the Middle East, more popular as Alba. The former successfully initiated real-time payments to the latter utilizing the JPM Coin.

Ali Mousa – CEO of JPMorgan Bahrein – said Onyx is “committed to spearheading the construction of the next generation of clearing and settlement infrastructure.” The trial’s success would be beneficial for JMP Coin’s further development in the future, he concluded.

Featured Image Courtesy of Seeking Alpha

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Only 5% of JPMorgan’s Clients Believe Bitcoin Will Reach $100,000 in 2022 (Report)

by CryptoPotato

According to a recent survey, the vast majority of JPMorgan customers do not expect bitcoin to reach $100,000 in the following 12 months. Still, more than 40% of the participants expect the asset to sit at around $60,000 by the year’s end.

JPMorgan Clients Do Not Expect BTC at $100K This Year

The largest cryptocurrency by market capitalization did not manage to climb to the often-touted milestone of $100,000 last year despite numerous predictions from experts and analysts. In fact, bitcoin finished 2021 on a downtrend, which continued in the first days of 2022.

However, some analysts and proponents of the asset still believe that it can reach this price level in the next 12 months.

In contrast, most clients of the US multinational bank JPMorgan Chase & Co are skeptical of such a scenario, according to a recent poll reported by Bloomberg. Only 5% see bitcoin trading at over $100,000 before the end of 2022.

Nikolaos Panigirtzoglou – a strategist at the bank – said he is not surprised by the bearishness his clients have displayed regarding BTC’s future. In his view, the coin’s “fair price” sits between $35,000 and $73,000, and it depends on what investors assume about its volatility ratio versus gold.

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It is worth noting, though, that the top answer, with 41%, is bitcoin to trade at around $60,000 by the year’s end, or approximately 40% increase of the current price of the asset.

The Contrary Forecasts

Unlike JPMorgan’s clients, Nayib Bukele – the pro-bitcoin President of El Salvador – predicted a price tag of $100K for the leading cryptocurrency sometime in 2022. He also envisioned that at least two more nations will follow his country’s path and adopt BTC as a legal tender over the course of the ongoing year.

Nexo’s Co-Founder Antoni Trenchev also sees the asset reaching the six-digit milestone. According to him, such a price surge will be fueled by the rising institutional adoption and will happen by the middle of 2022.

In addition, the 35-year-old Bulgarian opined that bitcoin is an inflation hedge equal to gold. The current inflation rate in most countries is spiking drastically, which could be another reason to drive BTC’s USD value up.

Featured Image Courtesy of Corporate Finance Institute

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Bahrain’s Central Bank Declares Its JPM Coin Payment Test a Success

by CryptoPotato

The Central Bank of Bahrain (CBB) has successfully completed a test of JPMorgan’s JPM Coin. The latter is a digital currency designated to make payments using blockchain technology.

First Tests for JPM Coin in The Region

Bahrain’s central bank revealed it is committed to improving the customer experience for secure and efficient settlement services. Seeking to achieve its mission, the financial institution completed a trial of JPMorgan Chase’s JPM Coin. This is the first test of its kind for the US bank’s blockchain product in that part of the world.

The experiment involved two other entities: Manama-based Bank ABC and Aluminium Bahrain – the first aluminum smelter in the Middle East, more popular as Alba. The test enabled the former to initiate real-time payments to the latter utilizing the JPM Coin.

Bahrain’s central bank supervised the project as the results were labeled “promising.” Mr. Rasheed Al-Maraj – Governor of the CBB – highlighted the experiment’s success, stating that the Kingdom will continue employing pioneering technologies to enhance the local financial network.

“Working with Alba, Bank ABC, and Onyx from JPMorgan, we aspire to address and eliminate the inefficiencies that exist today in the area of ​​traditional cross-border payment,” he added.

In turn, Mr. Sael Al Waary – Group Executive Vice President of Bank ABC – said that participating in the test marks the achievement of an “important milestone” for his firm. He predicted that cryptocurrencies will play a “critical role” in transforming digital economies in the future.

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Ali Mousa – CEO of JPMorgan Bahrein – also commented on the matter:

“JPMorgan’s ONYX subsidiary is committed to spearheading the construction of the next generation of clearing and settlement infrastructure… The completed testing with Alba and Bank ABC will help inform further development of the JMP digital currency systems for future use by our banking partners.”

JPMorgan’s Crypto Offerings

Even though its CEO Jamie Dimon is one of the biggest critics of the digital asset industry, the aforementioned initiative is not the only crypto-related move the company has ever done.

Last summer, the US bank allowed its wealth management clients to get involved with six cryptocurrency funds. Four of the products are from Grayscale Investments and include Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Cash Trust (BCHG), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG), while Osprey Bitcoin Trust (OBTC) is part of the Osprey Funds.

The last one is a new bitcoin fund created by the digital asset company NYDIG, which was designed only for private bank customers.

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Ethereum Is Losing Dominance in the DeFi Space Claims JP Morgan

by CryptoPotato

Analysts at the giant multinational investment bank, including the Managing Director – Nikolaos Panigirtzoglou – noted that Ethereum is gradually losing its dominance in the Decentralized Finance (DeFi) ecosystem.

Numerous cryptocurrency protocols such as Terra, Avalanche, and Solana have emerged as strong competitors in 2021. As such, Ethereum’s supremacy is at risk of being further eroded in the ongoing year, the experts added.

Still N1 But Losing Its Domination

Citing Nikolaos Panigirtzoglou, as well as other analysts at JPMorgan Chase & Co., Bloomberg reported that Ethereum currently accounts for nearly 65% of DeFi’s market share. However, the protocol is gradually losing its dominance, as at the beginning of 2021, it was almost 100%.

Ethereum
Ethereum’s share in DeFi, Source: defillama.com

The experts opined that Ethereum will gain steam again only when the final phase of Sharding – the “most critical” development for scaling the ETH network – gets completed in 2023. Until then, projects such as Terra, Binance Smart Chain, Avalanche, and Solana might close the gap even more as they have been receiving large amounts of funding and public attention.

“In other words, Ethereum is currently in an intense race to maintain its dominance in the application space with the outcome of that race far from given, in our opinion,” the JPMorgan analysts said.

Ether – Ethereum’s native token and the second-biggest cryptocurrency by market capitalization – finished 2021 with a price increase of nearly 220%. Nonetheless, the experts argued that its USD value could suffer in the short term due to the network’s weakened supremacy in the DeFi sector.

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JPMorgan Analysts Keen on Ethereum And Staking

The Wall Street banking giant, and specifically its CEO Jamie Dimon, has been one of the biggest opponents of bitcoin in recent years. The top exec urged investors numerous times to stay away from the primary digital asset, calling it “worthless.” On the other hand, JPMorgan seems to have a completely different stance on Ethereum.

In April last year, analysts at the financial institution stated that ETH is outperforming BTC, expecting the trend to continue. In their view, bitcoin is a store of value, while its rival is a technology and the backbone of the entire crypto-native economy.

A few months later, the same researchers said that protocols running on proof-of-stake mechanisms (like Ethereum aims to become soon) are much more energy-efficient than bitcoin, which employs proof-of-work. As such, some investors might be more inclined to invest in ETH rather than BTC.

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Ethereum back in price discovery as ETH approaches $5K

by Cointelegraph

Ethereum blockchain’s native asset, Ether (ETH), touched a new record high on Nov. 8, supported by a rally across the top cryptocurrencies ahead of a key United Stat inflation report this week.

ETH’s price rose by 3.30% in the past 24 hours to $4,770 for the first time in it history as Bitcoin (BTC) reclaimed $66,000, demonstrating the strong positive correlation between the two digital assets.

Cryptocurrency correlation table (based on data collected in the last 24 hours). Source: Crypto Watch

Inflationary pressure returns

Wall Street economists anticipated the U.S. Consumer Price Index to rise to 5.8% in October ahead of the Bureau of Labor Statistics’ inflation report on Wednesday. That would log a step up from the 5.4% tempo recorded in September, the highest since 1990.

Additionally, consensus forecasts observed by Bloomberg suggested that the U.S. consumer prices rose 0.6% between September and October, up from 0.4% between August and September.

U.S. headline inflation. Source: Bloomberg, Bureau of Labor Statistics

The latest inflation figures came after the Federal Reserve’s policy meeting last week. The U.S. central bank decided to unwind its $120-billion-a-month asset-purchase program to tame the persistently rising consumer prices and bring them down to its intended 2% target. 

But the Fed officials stuck to their long-term view that inflation is “transitory” in nature, eventually deciding to keep their benchmark interest rates near zero. That kept Bitcoins overall bullish momentum intact, given its high returns in the period of ultra-low interest rates and massive bond-buying.

ETH price technicals

Ether’s technicals supported an upside outlook, with the price trending eying a run-up toward its prevailing ascending channel’s resistance trendline — near the $4,800–$5,000 area — as shown in the chart below.

ETH/USD daily price chart featuring its ascending channel setup. Source: TradingView

Additionally, the ongoing bull flag breakout setup also shifted Ether’s profit target to near $4,800.

Bernhard Rzymelka, global markets managing director at Goldman Sachs, anticipates Ether to have hit $8,000 by December 2021 if the token keeps tracking inflation expectations.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.