The JP Morgan global research team has presented an optimistic outlook for cryptocurrencies in the report, entitled “Decrypting Cryptocurrencies: Technology, Applications, and Challenges.”
The bearish outlook from major fund managers and big banks added strongly to the crash of cryptocurrency prices.
Chief Executive Jamie Dimon had strongly criticized bitcoin and other digital currencies. Goldman Sachs and Warren Buffett have followed his footprints; warning investors against the cryptocurrency mania for fears of a bad ending.
The Upbeat Outlook from JP Morgan’s Research Team
However, JP Morgan’s research team has painted a different picture; the team predicts cryptocurrencies have the potential to attract investments in the years to come, especially from investors and traders who are doubtful of regulated and centralized markets.
“Cryptocurrencies are unlikely to disappear completely and could easily survive in varying forms and shapes among players who desire greater decentralization, peer-to-peer networks, and anonymity, even as the latter is under threat,” JPMorgan research team said.
The research team has highlighted strong confidence in the blockchain technology. The blockchain technology has the potential to change global dynamics in terms of storage and tracking perspective.
The team further believes that blockchain technologies can help banks in various ways, including the trade finance, transparency, and as a payment system.
Furthermore, while it’s true that cryptocurrencies are significantly volatile compared to commodities and stocks, the team predicts that investments from fund managers in bitcoin and other digital currencies can help to mature the market, resulting in tighter spreads and lower volatility.
Coordinated Actions are Required
The illegal transfer of money using digital currencies has forced several countries to ban cryptocurrency trading. Countries like South Korea, India, and the United States are making individual decisions in regulating virtual currencies. JP Morgan team has emphasized on the need of taking coordinated steps in regulating digital currencies.
“So far, there is little global coordination on cybercurrency regulation,” JPMorgan said.
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