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Why JPMorgan Chase Suddenly Found “Intrinsic Value” in Bitcoin

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Banking giant JPMorgan Chase & Co. is not much of a bitcoin fan. The $2.63-trillion behemoth found itself on the opposite side of cryptocurrencies ever since its chief executive officer, Jamie Dimon, called bitcoin a fraud. He said in 2017 that the cryptocurrency was “not a real thing,” and will eventually die.Two years later, bitcoin is well and alive, sitting atop a $141.8 billion valuation at press time. It is likely to grow further as a wave of mainstream financial institutions builds an investment-worthy infrastructure around it. Fidelity Investments and TD Ameritrade, for instance, are close to offering Bitcoin trading services to their institutional clients.Nasdaq, the world’s second largest exchange, is reportedly testing bitcoin-enabled investment products. The New York Stock Exchange (NYSE) is not behind as it awaits regulatory approval for listing the world’s first bitcoin-based exchange-traded fund in association with VanEck, a Wall Street investment giant.Mr. Dimon’s predictions about BTC are failing evidently. While he has distanced himself from commenting on the cryptocurrency, his team of analysts is strategically attempting to jump on bitcoin’s side. They recently said in a note, as seen by Bloomberg, that BTC is a commodity with intrinsic value.Hey @jpmorgan your CEO previously wrote that “Bitcoin is a fraud that will eventually blow up” and now less than two years later you acknowledge it is a commodity with an intrinsic value of slightly under 5K/coin. What’s changed? $BTC pic.twitter.com/Z8K0ybDk2B— The Don (@DonnyCrypto) May 20, 2019 Overvalued but ValuedThe JPMorgan strategists wrote that the bitcoin price had gotten ahead of its actual value in its recent rally. They came to call the “fraud” an overvalued asset by comparing it with commodities like gold.“Over the past few days, the actual price has moved sharply over marginal cost,” the analysts told Bloomberg. “This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”In 2026, JPM will be telling us that $BTC is a total scam at 365k and is worth 250k max. https://t.co/2lFR59SUID— Su Zhu (@zhusu) May 20, 2019
The JPMorgan analysts concluded bitcoin’s actual rate after studying its production costs, based on factors such as computational power, electricity payments, and hardware energy output. They said:“Defining an intrinsic or fair value for any cryptocurrency is clearly challenging,” the analysts continued. “Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.”

Nonetheless, the fact that JPMorgan letting its strategists treat bitcoin as a commodity validated the bank’s softening stance on the cryptocurrency. Morgan Creek Capital co-founder Anthony Pompliano looked at the banking behemoth’s move as a sign of bitcoin’s global adoption.

“Never listen to what a bank says,” he said. “Watch what they do.”

Skepticism, Meanwhile

As JPMorgan takes baby steps towards recognizing bitcoin as a commodity, others believe that the cryptocurrency does not fit the criteria. According to Professor Emilios Avgouleas, a financial scholar associated with the University of Edinburgh, a commodity should be tangible, and bitcoin doesn’t have any physical representation.

eToro’s senior market analyst, Mati Greenspan, believes otherwise. He said bitcoin and commodities like gold shared similar characteristics but have distinctive features.

“They have similar properties, but each has distinct benefits,” Greenspan said. “For example, bitcoin can be digitally transmitted across borders, while gold is used in jewelry and electronics.”

The usability alone provides intrinsic value to bitcoin. JPMorgan is right.

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NYSE files a trademark application for trading NFTs

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The world’s largest stock exchange may be planning to bring business into the Metaverse.

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Traders say $4,000 Ethereum back on the cards ‘if’ this bullish chart pattern plays out

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Global tensions that could trigger a correction in markets abound, but traders say ETH’s current setup could result in a swift return to the $4,000 level.

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CryptoPunks community reacts to the ongoing copyright battle between V1 and V2

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Although the collection is no longer deemed authentic by Larva Labs, its creators alleged sold 210 ETH worth of CryptoPunks V1 when the wrapped versions first gained traction.

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Binance.US is under investigation from SEC over trading affiliates: Report

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Binance CEO Changpeng Zhao allegedly has connections to two market makers buying and selling crypto on Binance.US.

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Boost Insurance unveils product covering against crypto theft from qualified custodians

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Boost Insurance, an insurance infrastructure-as-a-service platform, alongside go-to-market partner, Breach Insurance, a company that provides insurance technology and regulated insurance products for the cryptocurrency market, today announced the launch of Crypto Shield, an insurance product for cryptocurrency available to retail wallet holders.

Crypto Shield covers the theft of cryptocurrency while in the custody of a qualified custodian.

The Crypto Shield product allows individuals to purchase protection for their crypto wallets held by select custodians. In the case that the custodian is breached or suffers a social engineering attack resulting in lost assets, individuals insured under Crypto Shield can be reimbursed for the value of their policy.

Boost + Breach

While there is some commercial insurance available to cryptocurrency institutions, Breach envisioned Crypto Shield as a solution to the protection gap that currently exists for individuals holding crypto, securing a partnership with Boost to assist in bringing the Crypto Shield product to life.

Boost’s insurance infrastructure-as-a-service packages the necessary operational, technological, compliance, and capital requirements for new insurance programs into a white-label solution, enabling insurtechs like Breach to swiftly launch new lines of business.

“Boost’s deep expertise and insurance infrastructure-as-a-service platform, and Relm’s industry-leading crypto reinsurance capabilities, have positioned Breach to bring a highly complex insurance product to the market in a beautifully delivered customer experience.”
– Eyhab Aejaz, Co-Founder & CEO at Breach

To deliver that product in a seamless experience, Boost and Breach’s platforms connect via API, allowing Boost’s policy administration system to deliver back-end management for the Crypto Shield product. Breach’s customers are then able to purchase and manage every part of their policy and claims process, all from within Breach’s proprietary crypto insurance platform.

“With Boost’s infrastructure-as-a-service platform, companies like Breach can launch and deliver innovative new insurance offerings, at a fraction of the time and cost required to build a full-stack insurance program from scratch.”
– Alex Maffeo, CEO & Founder of Boost

In addition to powering the new product, Boost and Breach partnered to source and secure the necessary reinsurance backing from industry expert Relm Insurance Ltd. (Relm), underwritten by Trisura Specialty Insurance Company. Operating out of Bermuda, Relm is a capacity provider to the crypto sector with a track record of insuring companies across the ecosystem. Relm has recently been awarded an ‘A Exceptional’ Financial Stability Rating (FSR) by Demotech.

“Relm’s partnership with Boost and Breach to reinsure the US’s first cryptocurrency insurance product for retail wallet holders is a milestone in supporting the development of crypto and blockchain technologies.”
– Joe Ziolkowski, CEO at Relm

The post Boost Insurance unveils product covering against crypto theft from qualified custodians appeared first on CryptoNinjas.

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