For all of JPMorgan Chase CEO Jamie Dimon‘s criticism of bitcoin, a strategist at the bank said Friday that bitcoin futures could “add legitimacy” to the potential new asset class.
“The prospective launch of bitcoin futures contracts by established exchanges in particular has the potential to add legitimacy and thus increase the appeal of the cryptocurrency market to both retail and institutional investors,” Nikolaos Panigirtzoglou, a global markets strategist at JPMorgan, said in a Friday report.
The Commodity Futures Trading Commission said Friday it will allow CME and its competitor, the Cboe Futures Exchange, to launch bitcoin contracts. CME, the world’s largest futures exchange, also announced its would launch bitcoin futures on Dec. 18.
“In all, the prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class,” Panigirtzoglou said. “The value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”
In contrast, Dimon has been an outspoken critic of bitcoin. The banking executive said in September the digital currency is a “fraud” that “won’t end well.” Dimon then said in October that people “stupid enough” to buy bitcoin will “pay the price for it one day.”
However, Dimon did say he believes the blockchain technology behind bitcoin was valid. He just did not understand digital currencies that are not backed by a government.
JPMorgan is already involved in blockchain-related projects. In 2015, the bank began working on Quorum, an open-source, enterprise-grade transaction network focused on data privacy. The platform is built on the network behind the digital currency ethereum.
The bank is also a founding member of the Enterprise Ethereum Alliance and partnered with the developers of privacy-focused digital currency Zcash in May.
Bitcoin surged above $11,000 Wednesday to an all-time high, after starting the year below $1,000. Bitcoin traded near $10,605 Friday, recovering partly from a sharp drop to near $9,000 Thursday, according to CoinDesk.
Source: Tech CNBC
JPMorgan strategist: Bitcoin futures can 'add legitimacy' to potential 'emerging asset class'