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JP Morgan Still Dabbling in Crypto, but Is the Bank Serious About Adoption?

4 mins
Updated by Ryan James
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In Brief

  • JP Morgan recently published a report analyzing the crypto market in the US.
  • JP Morgan has had a conflicting relationship with crypto, with CEO Jamie Dimon being anti-crypto while the bank has provided banking services for Coinbase and Gemini.
  • The bank has made various predictions about the crypto market, including that BTC will hit $150,000 in the long term and that it should be considered a hedge asset like gold.
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Earlier this month, JP Morgan published a report analyzing the crypto market in the United States. This is significant because JP Morgan is the largest US bank and has historically been skeptical of crypto.

Not only that, but US Investors continue to be the largest contributors to the crypto market. As such, the findings in JP Morgan’s report could shed light on what will happen in the crypto market in 2023.

A Weird Relationship With Crypto

First, some background about the megabank’s relationship with crypto. As some of you will know already, JP Morgan CEO Jamie Dimon is famous for being anti-crypto, and he’s been vocal in his opposition since crypto went mainstream in 2017. Yet, given the banking industry’s history of betting against their own investors, it isn’t hard to believe that Dimon has been secretly stacking sats all along.

Yet, JP Morgan, the bank has been a bit more balanced, especially during the current crypto cycle. It all began in February 2020, when JPM was reportedly considering merging its blockchain arm with Ethereum builder Consensus.

The bank has had conflicting views of crypto ever since. For example, in May 2020, it recommended that its clients stay away from crypto. Shortly afterward, it announced that it would be providing banking services for Coinbase and Gemini. 

Banks Have the Power to Punish Customers

Now, this is surprising given that JPM has also allegedly unbanked many crypto entities. For context, it reportedly closed a bank account of a crypto mining company in August 2021. And infamously, closed the bank account of Uniswap founder Hayden Adams with no explanation.

There has since been speculation that the order to close Hayden’s account came from the US government. In any case, in February 2021, JP Morgan said it did not expect companies to add BTC to their balance sheets like Tesla famously did- just two days later.

Later, JPM’s co-president, Daniel Pinto, admitted that the bank will get into Bitcoin “at some point.” Now, if that wasn’t hypocritical enough, JP Morgan also said that BTC was no longer a hedge due to its increased correlation with the stock market.

For Crypto or Against-Which is It?

One week later, JP Morgan sent a letter to clients recommending they allocate 1% of their portfolios to BTC as a hedge. Throughout 2000 and 22,021, JP Morgan was also frequently comparing BTC to gold. One month, its analysts would say that investors preferred BTC to gold, and another month, they would say that investors preferred gold to BTC.

Never mind that BTC being lumped in with gold technically makes it a hedge asset. Now, for what it’s worth, JPM apparently still believes BTC will hit 150K in the long term, a prediction that assumes BTC will compete with gold.

A Glowing Outlook for the Price of Bitcoin

Dimon, who has acknowledged that BTC could yet reach ten times the current price, still says he will not invest in it. He also called cryptocurrencies, “decentral Ponzi schemes” earlier this year. Now, despite the megabank’s bipolar opinion of crypto, the fact of the matter is that it has been investing in the industry and adopting it.

Consider that it led an investment in Consensus in April 2021, entered the Metaverse earlier this year, and made its first DeFi trade on Polygon just last month. 

Then, on December 13th, JP Morgan published what appears to be its most comprehensive crypto report to date.

It is titled “The Dynamics and Demographics of U. S. Household Crypto Asset Use.” The report begins with a short introduction that gives an overview of crypto adoption in the United States.

What’s interesting is that the authors refer to crypto assets as “crypto,” something that you almost never see in these institutionally oriented cryptocurrency reports. The report reveals that almost 15% of the US population has used or invested in crypto, at least according to JPM’s data. They attribute this spike in crypto adoption to the pandemic, specifically the resulting stimulus, which led to more investment.

The authors of the report also reveal that their data sample includes over 5 million of JPM’s customers, and reveal that over 600,000 of them made transactions related to crypto. They suspect that most customers lost money in crypto, but that they can’t be sure because they can only see fiat transfers in and out.

JP Morgan Still Remains Anti-Crypto

JP Morgan, the largest US bank, recently published a report analyzing the crypto market in the US. The report found that nearly 15% of the US population has used or invested in cryptocurrency. 

The report also found that younger people and those with higher incomes were more likely to own cryptocurrency. JP Morgan has had a complex relationship with cryptocurrency, with CEO Jamie Dimon being skeptical of it while the bank has provided banking services for the likes of Coinbase and Gemini. 

The bank has also made various predictions about the crypto market, including that BTC will reach $150,000 in the long term and that it should be considered a hedge asset like gold. At the same time, the JP Morgan CEO has railed against crypto calling it a “complete sideshow.”

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