Analysts of JPMorgan Chase largest financial holding sent out to clients a wide-ranging note on cryptocurrencies. The note contained the analysis of cryptocurrency market and prediction of the “destiny” of digital money as payment method.

According to Business Insider, the bank said it may make sense for some investors to include digital currencies in their portfolios as a hedge, it doesn’t view any cryptocurrency as a “legitimate competitor” to sovereign currencies.


“The huge volatility of the price of cryptocurrencies-with respect to either traditional currencies or to a basket of goods and services-has made use of cryptocurrencies as a unit of account impractical. Only hobbyists are using cryptocurrencies as a medium of exchange, at least for conventional transactions for goods and services.

At any rate, even a hypothetically stable-value cryptocurrency is unlikely to compete with the dollar for transactions in goods and services, in say, Chicago, or to compete with the euro in Stuttgart. Economists have long viewed successful, i.e. relatively price-stable, currencies as natural monopolies in a given geographic area. This particular natural monopoly arises as a result of the inherent network externalities: pricing a New York meal in yen makes little sense as almost all customers will be holding dollars,” the authors of the note remarked.

According to them, the only area where cryptocurrencies could compete with national currencies as a medium of exchange is in the black market.

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