- JPMorgan (NYSE:JPM) gives reasons behind Bitcoin’s limitations as a legal tender.
- One factor is that 90% of Bitcoin’s supply is in illiquid hands
- Another is Bitcoin’s volatile nature.
JPMorgan, the Global Investment bank, believes that making Bitcoin (BTC) a legal tender in El Salvador is not the best move. It went on to list out the reasons behind BTC’s ‘limitations’ in terms of being a legal tender.
In detail, the entity says that problems are likely to occur as most of the BTC supply is in the hands of illiquid hodlers. That is, a whopping 90% of BTC that hasn’t been moved for over a year.
Moreover, the daily payment activity in the country is just around 4% when talking about the recent on-chain transaction volume. More so, only 1% of the total value in tokens has been moving between wallets in about a year.
This points to one of the possible limitations of BTC as a legal medium of exchange. Specifically, El Salvador made Bitcoin a legal tender on June 8, 2021...