analyst, bitcoin allocation, capital inflows, JMP Securities, morgan stanley, wall of money, wealth management, wealth manager, wealthy clients

JMP Securities has predicted that “$1.5 trillion of incremental capital†could flow into bitcoin, an amount greater than the cryptocurrency’s current market cap. The firm sees more wealth management companies following Morgan Stanley’s example to offer bitcoin to their clients. “Around $30 trillion of assets in the U.S. retail wealth management industry currently do not have direct access to bitcoin,†he said.

$1.5 Trillion Could Flow Into Bitcoin, Analyst Says

San Francisco-based financial services firm with offices nationwide JMP Securities said last week that Morgan Stanley‘s move to offer wealthy clients exposure to bitcoin is the “tip of the iceberg†and could result in $1.5 trillion flowing into the cryptocurrency.

Devin Ryan is a managing director and equity research analyst covering investment banks, brokers, and asset managers at JMP Securities. He also serves as the firm’s Head of Business Development. JMP Group is listed on the New York Stock Exchange under the symbol JMP.

Ryan explained in a note to clients that Morgan Stanley’s announcement will serve as a catalyst for other banks to follow suit. Morgan Stanley said last week that it will soon allow rich clients access to three bitcoin funds, making the firm the first major bank to do so.

The analyst noted that “Around $30 trillion of assets in the U.S. retail wealth management industry currently do not have direct access to bitcoin,†elaborating:

The price of bitcoin stands at $56,569 at the time of writing based on data from markets.Bitcoin.com. The cryptocurrency’s market cap is approximately $1.06 trillion. The BTC price rose almost 5% Wednesday, boosted by the news of Elon Musk’s Tesla accepting bitcoin as a means of payment without converting into fiat currency.

Ryan’s 5% allocation to bitcoin is not uncommon. This week, Mad Money host Jim Cramer recommended investors reduce their gold exposure and put 5% of their portfolios in bitcoin. Shark Tank star Kevin O’Leary also believes that a 5% allocation to bitcoin is optimal. Meanwhile, Jack Dorsey’s Square Inc. currently holds 5% of its total cash reserves in bitcoin.

According to Ryan, “Motivations range from missing the opportunity at best, or at worst, seeing business disruption if clients decide better alternatives exist, which could negatively impact growth or competitive positioning.â€

The analyst also predicts the same trend with wealth managers outside the U.S. He sees “substantial capital pools opening up, fueled by the same drivers, though dynamics vary by region,†Business Insider conveyed. While Ryan believes that the crypto industry is still in the “very early innings of adoption,†he said:

What do you think about JMP Securities’ bitcoin prediction? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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