JP Morgan announced that it is going to have its very own cryptocurrency. Some individuals in the crypto industry have seen this as legitimacy on the part of cryptos. A few months back, JP Morgan called Bitcoin “a fraud”. And now, this move is a 180-degree turn from their past statement.
Jamie Dimon even hinted the possibility that the JP Morgan Coin can be used in the future for commercial purpose. He said that “JP Morgan Coin could be internal, could be commercial, it could one day be consumer”. The reason for the design of this cryptocurrency is to allow faster transactions between clients in the wholesale payments business. Specifically, it is targeting the same segment as that of Ripple. It is looking to make international transactions cheaper by using blockchain technology.
However, the statement made by Dimon is still speculative at this point. Currently, the bank still has no plan to offer the JPM Coin to individual users. Currently, the cryptocurrency is being tested on its corporate clients.
Ripple vs. JP Morgan?
There are those saying that JP Morgan’s move to explore blockchain can directly affect Ripple. The JP Morgan coin is similar to the xRapid service that is being offered by Ripple. And also, the price of JP Morgan is pegged at US dollar. This means that it is a combination of both xRapid and qualities of a stablecoin.
But of course, there are a number of differences. One, JP Morgan coin isn’t exactly decentralized. It is not even going to be available on the open market. It is mainly an internal tool that will process payments. And because of this, it doesn’t really have the ability to appreciate in value just like other cryptocurrencies.
Wet Noodle Compared to Bitcoin?
Max Keiser who is known for being an anti-establishment figure mentioned on Twitter that “JP Morgan’s Jamie Dimon showed up to a street fight with Bitcoin armed with a wet noodle called JPM Coin”.
He mentioned that Wall Street will “never catch up” to Bitcoin’s crypto dominance. Bitcoin in 2017 was able to hit near $20K. However, in the following months, the crypto market had a correction and Bitcoin lost almost 80% of its peak value.
Will Crypto Market Recover Soon?
And now, cryptocurrencies are still struggling with regulatory clarity. Regulators are still looking to crack down on ICOs. In fact, months ago, US Securities and Exchange Commission targeted token endorsed by celebrities such as Floyd Mayweather and DJ Khaled. In addition to this, the agency is also hesitating towards having a Bitcoin ETF since the market is prone to market manipulation.
Recently, Tom Lee who is working as an analyst for Fundstrat believes that he believes that a Bitcoin ETF is needed if we are expecting the crypto market to go back up. However, sadly, he believes that a Bitcoin ETF won’t be happening this year. He believes that the SEC is still looking for transparency and stability within the market before it is going to be comfortable in approving the Bitcoin ETF.
Do you think that there will be more institutional investors that will invest in blockchain and cryptocurrencies this year though?