Banking Behemoth JPMorgan Has Doubts About El Salvador’s Leap Into Bitcoin – Here’s Why

Banking Behemoth JPMorgan Has Doubts About El Salvador’s Leap Into Bitcoin – Here’s Why


Banking giant JPMorgan has some reservations regarding El Salvador’s recent decision to make Bitcoin legal tender.

In a report revealed by Bloomberg, analysts from the bank say they believe that BTC being used as legal tender will put strains both on Bitcoin and El Salvador itself.

 

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According to JPMorgan’s analysis, there is too much Bitcoin locked up in illiquid entities for it to function as a proper currency. They say that more than 90% of Bitcoin stays in the same hands for more than a year – with a “significant and rising fraction held by wallets with light turnover.”

“Daily payment activity in El Salvador would represent ~4% of recent on-chain transaction volume and more than 1% of the total value of tokens which have been transferred between wallets in the past year.”

The illiquidity of Bitcoin that the bank alleges could act as, in their words, “potentially a significant limitation on its potential as a medium of

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