On Friday (October 3), Nikolaos Panigirtzoglou, a Managing Director at J.P. Morgan who works on Global Market Strategy, published a report that talked about the long-term potential of Bitcoin.

Dr. Panigirtzoglou edits the weekly publication “Flows & Liquidity”, which is one of J.P. Morgan’s flagship publications. Before joining J.P. Morgan in 2004, he worked as a Financial Economist at the Bank of England. Dr. Panigirtzoglou holds a PhD in Finance from Queen Mary University of London, an MSc in Economics from London School of Economics, and MSc in Economics and Finance from Warwick Business School.

The latest edition of “Flows & Liquidity”, which was sent out to the bank’s clients yesterday, was titled “Bitcoin’s competition with gold”.

Here are a few highlights from this report:

  • “… Bitcoin could compete more intensely with gold as an ‘alternative’ currency over the coming years given that millennials will become over time a more important component of investors’ universe.”
  • “… given how big is the financial investment into gold at the moment, a crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term.”
  • “… the market cap of bitcoin would have to rise 10 times from here to match the total private sector investment to gold via ETFs or bars and coins.”
  • “Millennials and corporates endorsement of bitcoin have also induced greater interest by institutional investors as evidenced by the spike in activity across both bitcoin futures and options at CME, and that was before PayPal’s endorsement this week.”

As Daniel Tapiero noted on Twitter, this report seems like the most bullish analysis of Bitcoin that J.P. Morgan has ever published:

It also is perhaps the best example of how JPMorgan Chase’s stance on cryptocurrency has softened in the past couple of years.

Jamie Dimon, chairman and chief executive officer of JPMorgan Chase, has long been a fan of blockchain technology but not cryptocurrencies. In fact, he called Bitcoin a “fraud” as early as September 2017. 

According to a report by Bloomberg, on 13 September 2017, after calling Bitcoin “a fraud”, Dimon went on to say that Bitcoin was “worse than tulip bulbs.” And if a JPMorgan trader began trading in Bitcoin, the J.P. Morgan CEO said that he would “fire them in a second.”

He went on to say that:

If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars. So there may be a market for that, but it’d be a limited market.

On January 2018, in an interview with FOX Business’s Maria Bartiromo, Dimon said that he regretted his previous comments about Bitcoin, and expressed his faith in blockchain technology: “The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s you have to look at individually. The bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I’m not interested that much in the subject at all.”

In an interview with the Harvard Business Review (July–August 2018 Issue), here is what Dimon had to say about crypto: “I probably shouldn’t say any more about cryptocurrency. But it’s not the same as gold or fiat currencies. Those are supported by law, police, courts. They’re not replicable, and there are strictures on them. Blockchain, on the other hand, is real. We’re testing it and will use it for a whole lot of things.”

Then, on 14 February 2019, CNBC reported that JP Morgan had created its own stablecoin — JPM Coin — “a digital token that will be used to instantly settle transactions between clients of its wholesale payments business.”

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.