JPMorgan Chase & Co. is finally agree that investors can add up to 1% of their allocation to bitcoin (EXANTE: Bitcoin) in order to achieve "any efficiency gain in the overall risk-adjusted returns of the portfolio," Bloomberg reports, citing the bank's strategists Joyce Chang and Amy Ho.
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The US bank's strategists believe that investors can invest 1% of bitcoin or other cryptocurrencies in an investment portfolio as a hedge against stocks, bonds or commodities.
"In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio," the analysts wrote in a note.
However, the bank highlights cryptocurrencies should only be considered as investment vehicles and not funding currencies. So when looking to hedge a macro event with a currency, we recommend a hedge through funding currencies like the yen or US dollar instead, the strategists emphasized.
As iHodl earlier reported, JPMorgan believes the largest cryptocurrency by market capitalization currently lacks of new buyers to sustain its prices, which makes its position 'unsustainable'. The bank says the cryptocurrency's volatility should subside in order to stay above the 48,000 mark.
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