JP Morgan Chase and Goldman Sachs were strongly criticizing Bitcoin and other cryptocurrencies since the very beginning. But later, when they have realized that the market is settling, they have changed opinion. The reality is that several financial institutions are embracing cryptocurrencies and blockchain technology. Goldman Sachs and JP Morgan couldn’t be behind this trend.

Cryptocurrencies Could Serve as Money… in Some Countries

While in some places like Europe or the United States, transactions are fast and currencies stable, cryptocurrencies struggle to succeed. But in other countries like Venezuela or in sub-Saharan Africa, high inflation and political turmoil killed national currencies. Cryptocurrencies are growing in these places. Some of them like Ethereum or Bitcoin may be traded at Premium prices due to the higher demand.

In a recent report, Goldman Sachs’ strategists wrote:

“In recent decades, the US dollar has served its purpose relatively well. But in those countries and corner of the financial system where the traditional services of money are inadequately supplied, Bitcoin (and other cryptocurrencies) may offer viable alternatives.”

The report explains that cryptocurrencies shouldn’t be thought to wait for astronomical returns. These returns that the currencies had during most of the last year, shouldn’t be the rule for the years ahead.

Goldman Sachs Logo Cryptocurrencies

Goldman Sachs Logo

“Our working assumption is that long-run cryptocurrency returns should be equal to (or slightly below) growth in global real output – a number in the low single digits”, commented the strategist. “This, digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals.”

During the last years, cryptocurrencies have increased in value. Bitcoin started January being traded around $950 dollars and it reached $20,000 in December. On January the 11th, Bitcoin is traded around $13,900 dollars.

Jamie Dimon Regrets Calling Bitcoin a Fraud

During an interview with FOX Business Network, Jamie Dimon, JP Morgan Chase CEO, said that he ‘regrets’ saying that Bitcoin is a fraud.

“The bitcoin to me was always the what the governments are going to 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,” he said.

Jamie Dimon has been commenting about bitcoin several times. Most of the opportunities he had to speak about cryptocurrencies he did it in a negative way. He has even threatened JP Morgan’s employees not to buy Bitcoin because he will fire them immediately.

In addition to it, he said that Bitcoin was going to die due to regulations. Regulations are not killing this cryptocurrency, but legitimizing it.

Besides that, JP Morgan and its CEO believe that Blockchain technology are a key feature of Bitcoin and cryptocurrencies. The bank is working with blockchain in order to make transactions faster and cheaper. Banks are not the only institutions working and benefiting from this technology. Governments and enterprises from different fields are using blockchain technology to improve their products and services.

Image Courtesy of Getty Images

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