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JPMorgan Lists Bitcoin’s Limitations as a Legal Tender

Published 07/12/2021, 11:59 AM
Updated 07/12/2021, 12:00 PM
© Reuters.  JPMorgan Lists Bitcoin’s Limitations as a Legal Tender
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  • 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...

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