After Goldman Sachs announced the hiring of crypto trader Justin Smith as vice president of digital assets, JPMorgan Chase's director, Jamie Dimon, apparently decided to forget what he called crypto investors "stupid," and established the position of "head of cryptocurrency strategy.” A specially trained person will be responsible for the development of banking crypto projects, the implementation of the blockchain system and, most interestingly, will work with crypto depositary services.
Let us recall that many professional players refrain from investing in digital assets due to the lack of a proper infrastructure, including depositories, which transfer ownership of assets. Thus, the world's largest banks recognize the future of crypto assets and blockchain. They are not, however, in a hurry to take part directly in trading coins. At the same time, organizations have not yet begun investing in cryptocurrencies as a certain asset refuge, like gold or silver, despite the growing tension in the global financial markets. Talk about replacing Bitcoin with precious metal in vaults has been going on for a very long time, why was it not implemented?
Having analyzed the data available from the moment of the first cryptocurrencies launch, one can see that Bitcoin's volatility in the 30-day interval is almost nine times higher than that of gold or the EURUSD pair. Fluctuations of Bitcoin can reach 3.8% per month, and this seriously complicates not only trade but also the use of cryptocurrencies as a means of payment or as a safe haven. One should not forget, however, about the most important factor, and that is the fact that the distribution of gold in the world is much higher than it is usually thought. According to the World Gold Council, central banks account for only 32,600 tons, or 17% of all gold mined, while jewelry accounts for 90,700 tons, or 48% of gold, 40,000 tons private investments, and industry accounts for 26,700 tons. Thus, it is difficult to manipulate prices for precious metal and greatly inflate or reduce quotes, even despite all the efforts made by the sharks from Wall Street. Over the past 18 years, market prices for gold have almost always remained 5 to 10% higher than the cost of its production (we have the example of Barrick & Newmont). The Central Bank has long financed rallies in financial markets when pursuing a policy of cheap money, and the only available way to continue it is to channel all available funds into stocks, bonds, and real estate while avoiding the significant interest of speculators in commodity assets, which can now be safely attributed to Bitcoin. Certainly, while traditional markets live on, we will not see the world's largest banks among the investors in Bitcoin, rather on the contrary, we will be hearing negative and "witty" comments from leading managers from time to time, and big players will refrain from direct participation in trading (at least openly).
Of course, one should not blindly believe their criticism and arguments, as 95% of dollars exists only in digital form, and the current stock market is more reminiscent of a Ponzi scheme than any top-level cryptocurrency. The crypto industry was born very recently, and it would be foolish to expect more from it than it has already achieved in such a short period of time. There is a high probability that in the coming decade, the industry will come close to creating its own highly competitive banking system, which will be devoid of the basic problems being observed at the moment.