JMP Securities predicts that “US$1.5 trillion in incremental capital” may flow into Bitcoin, which is greater than the current market value of the cryptocurrency. The company saw more wealth management companies follow the example of Morgan Stanley and offer Bitcoin to its clients. He said: “The US retail wealth management industry currently has approximately $30 trillion in assets that cannot be directly used in Bitcoin.”
Analysts say that $1.5 trillion may flow into Bitcoin
The San Francisco-based financial services company with offices across the country said last week that Morgan Stanley’s move to provide bitcoin exposure to wealthy customers was “the tip of the iceberg” and could lead to an inflow of $1.5 trillion in cryptocurrencies.
Devin Ryan is the managing director and equity research analyst of JMP Securities’ investment bank, broker and asset manager. He also serves as the company’s business development director. JMP Group is listed on the New York Stock Exchange under the ticker symbol JMP.
Ryan explained in a report to clients that Morgan Stanley’s announcement will be a catalyst for other banks to follow suit. Morgan Stanley said last week that it will soon allow wealthy clients to access three Bitcoin funds, making the company the first large bank to do so.
The analyst pointed out: “At present, about 30 trillion US dollars of assets in the US retail wealth management industry cannot directly use Bitcoin,” he elaborated:
Make some assumptions that the relative investment portfolio accounts for 5% of the asset portfolio is relatively moderate. This alone represents $1.5 trillion in incremental bitcoin capital, which is higher than its current market value.
According to data from markets.Bitcoin.com, at the time of writing, the price of Bitcoin is $56,569. The market value of cryptocurrencies is approximately $1.06 trillion. Boosted by news of Elon Musk’s Tesla accepting Bitcoin as a means of payment without converting to legal tender, the price of BTC rose by nearly 5% on Wednesday.
It is not uncommon for Ryan to allocate 5% to Bitcoin. This week, Mad Money host Jim Cramer advised investors to reduce their gold exposure and invest 5% of their portfolio in Bitcoin. Shark Tank star Kevin O’Leary also believes that 5% of Bitcoin is the best choice. Meanwhile, Jack Dorsey’s Square Inc. currently holds 5% of its total cash reserves in Bitcoin.
According to Ryan, “The motivation may be that the best or worst opportunity is to miss an opportunity. If a customer decides to have a better option, they will see a business disruption, which may negatively affect growth or competitive position.”
The analyst also predicts that the same trend will occur in wealth management institutions outside the United States. He saw that “although the same dynamics vary from region to region, a large pool of capital is opening up driven by the same driving factors,” said Business Insider. Although Ryan believes that the crypto industry is still in the “early stages of adoption,” he said:
The road signs we follow are improving logically and within the expected range, and we think this is very optimistic.
What do you think of JMP Securities’ Bitcoin forecast? Let us know in the comments section below.
Picture Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for reference only. It is not a direct offer or solicitation of an offer, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. The company or the author shall not bear any direct or indirect responsibility for any damage or loss caused or allegedly caused by using or relying on any content, goods or services mentioned in this article or related thereto.