Why JP Morgan Is Finally Bullish on Bitcoin

JP Morgan expects Bitcoin to go up 10% a year more than stocks and bonds. And this is the first time that JP Morgan has ever ever estimated specifically what Bitcoin will do. Meanwhile, their own stock and other bank stocks are having a really rough run. We're going to talk about all that and more right now on the Daily Wolf. Let's go. What is up everybody? Welcome to the Daily Wolf on Yahoo Finance. I am your host Scott Milker, also known as the Wolf of All Streets. It is Tuesday, October 20th, and we have a lot to discuss. But the first thing I want to discuss is the fact that I have an extra special long interview coming on Friday on this very show with the legend Grant Cardone discussing how to blend real estate and Bitcoin. You do not want to miss that one. I'll be telling you about it each day before it actually comes. That'll be a 30inut show instead of a 15inut show. Now, the first story that we have today, I alluded to there in the title, and it's that banks are having a bad day and bad week and bad month. Here's my tweet on the subject. Bank stocks have been getting hit hard while the S&P sits about 1.6% off its record. To put some numbers to this, KBW bank index 13.8% below its August record close, six straight weekly losses. the longest run since since 2008. As you can see there, Goldman's down 24%, Morgan Stanley 23, Bank of America 23, City 18, JP Morgan outperforming at a mere 9% down. So, as it says there in the tweet, the weird part here is that Q3 earnings have actually been mostly fine and there's no fundamental reason that you can look at in the actual bank's earnings or structure that would make them down. But the answer obviously is rates right there at the bottom. The Fed hiked in September. The 10-year touched 5.31% this month and is still 5.1%. US banks are carrying 326.7 billion in unrealized securities losses. Not a crisis, a warning light worth watching. Now, Jamie Diamond described the US comedy as booming, which it has been, but warned about inflationary pressures. Obviously, higher interest rates dramatically impact the model of banks because it's hard for people to want to go take a loan at a higher interest rate. Therefore, they don't. Therefore, banks are under pressure. Therefore, we see exactly this. I mean, you'll remember when Silicon Valley Bank collapsed in 2023. It was effectively a result of rates rising, right? They had a whole bunch of debt that was at lower rates and as rates went up, it put pressure on them. That could happen again. Obviously, if we continue to see interest rates rising massively, the economy here is booming according to Jamie Diamond. Uh bank shareholders would like to know when their invitation to the party arrives. So, we may have banks under pressure here, their stocks dropping, which is not necessarily a crypto story, but interest rates certainly are. But uh we saw something a slight anomaly yesterday, a disturbance in the force if you will in the Bitcoin ETF space. Here is the story. Bitcoin ETFs just saw their biggest day in a month thanks entirely to Black Rockck. So, this is a crazy story because Black Rockck saw 666 $665 million inflow yesterday, which is its most this entire year. Actually, the largest daily inflow since October 7th, 2025 when the market was at all-time highs and price didn't budge at all. So, it's a bit strange. Normally you see a huge inflow day right after you see a massive green candle on the Bitcoin chart. What else is curious here? Fidelity's FBTC and Gayscalees GBTC saw outflows of 83.6 million and 54.9 million respectively. So Black Rockck did 665 million but collectively it was only 526.6 million and price didn't budge at all. So remember, first of all, ETFs generally react to what happened a day before. And a day before in this case is Friday because it's a trading day before because these aren't trading on Saturday and Sunday. But still Friday, we saw no massive spike in price by any means. So I asked my friend Alex Thorne from Galaxy Research, who is on top of this more than almost anyone in the industry, what happened. He had a very, very clear explanation. And I find it very interesting. We've seen a major trend of people converting their spot bitcoin into ETFs and specifically into the black rockck ETF. Especially since we've had all the hacks with cold card and ledger. A lot of people giving up self-custody and transferring their assets with no tax event. This is something you can do directly into the Bitcoin spot ETFs. I know Bitwise has seen a lot of that, but as with anything in the Bitcoin uh ETF space, Black Rockck gets the bulk of it. Now, why would they do that? A uh because there's spyware in your ledger and your cold card. Uh you didn't roll the magic wizard dice enough times to protect your life net worth, right? So, there's people who just are sick of trying to custody their own Bitcoin and want to move it into an ETF rapper. There's probably a lot of people uh who also want to be able to do things that they can't do with their spotty ETF. Take a loan against it, right, as a part of their securities portfolio or participate in the massive trades that are happening where you can short the futures and buy the spot and blah blah blah blah blah. So, this was a unicorn of an event in my opinion, not something that we've generally seen in the past where you see a major inflow into one issuer with outflows from the others and a historic day without price moving. I'm looking forward to unpacking this further if we get more information. They're obviously attracting major money here into IBIT, but they're also proposing another fund for investors who want a different kind of Bitcoin exposure. Black Rockck all over my news today. Bitcoin ETF news. Black Rockck wants to launch a Bitcoin fund that limits your losses. What's the catch? It it it limits your upside. That's the catch, right? There's no there's no free lunch here. So, they have proposed a uh ETF called PBIT. Peebbit. I I read that as like a peanut butter and it sandwich. I don't really know what that is, but like who's not thinking peanut butter it time? Peanut butter it time when they read read pit. So basically the proposed fund here and this is not new. There are others uh and this is very common outside the Bitcoin space would use options referencing IBIT or similar Bitcoin exposure alongside cash and fixed income investment. So it protect your downside but obviously that also caps your upside. They usually have three overlapping call option spreads to do this. selling higher strike calls obviously limits the upside to what's happening here. But this is going to be a more interesting kind of product for someone who wants some Bitcoin exposure but doesn't necessarily want to suffer all the volatility, doesn't necessarily believe that it's going to go to a million dollars anytime soon. They can get that with the downside protection. We've seen actually quite a few novel Bitcoin ETFs, ones that earn a slight bit of income and cap the upside. Well, this is another one and it is coming from Black Rockck. We don't know what the fees will be, the funds filed but not launched, and we don't know how much the upside will be capped because it will vary by position and market conditions. So, while Bitcoin is here designing ways to manage Bitcoin's downside, JP Morgan's asset managers have put a number on its longterm upside. Here you go, guys. that JP Morgan, the Jaime Diamond, JP Morgan, JB Diamond, the guy who said, "Anyone who works at my company that touches Bitcoin will be fired. It's a scam. It's rat poison." All of those things. JP Morgan expects Bitcoin to beat stocks and gold. But there's a catch. No, there isn't. Ignore that part. Bitcoin's going up and all your other stuff is going down. It's over. Buy Bitcoin or stay poor. New headline. Buy Bitcoin. Oh, that doesn't say that. I thought I was going to say buy Bitcoin or Stapore. That I don't mean that. I said that on TV. That's probably a bad idea. JP Morgan forecast 10% Bitcoin returns. Diamond, look away. Look away. Right. Very painful for Jamie Diamond because he hates this thing. And JP Morgan just getting more deeply entrenched in the Bitcoin space. But he said it would go up basically 10% a year. He thought stocks would go up about 7 point. They thought they not he that stocks would go up 7.5% a year. gold would go up 5.5% a year. This is the first time ever that JP Morgan has attached a number at all to their expectations for Bitcoin. To me, that's the news. Like 10%, 35%, 80%. I look at this and go, you know, what is this a projection for ants? I think it'll go up much more. I may or may not be biased, but the very fact that JP Morgan is now being forced to do research that says Bitcoin will outperform your other assets to me is absolutely huge. JP Morgan here studying crypto as an investment finally while Mastercard builds services around its use for payments. Here you go. That's big. Mastercard introduces risk intelligence to enable more secure stable coin payments. So, this is a service they just announced in 2020 stable coin security service. they're calling it, which analyzes payment and blockchain information for fraud, scam, and sanctions risk. Basically, they're going to provide instead of being replaced themselves by stable coins, they're wholesale going into it, going to provide infrastructure here for banks basically to have risk management and use stable coins. Really, really smart. It provides financial institutions with a risk score before a payment is complete. So this is going to first launch in North America with worldwide commercial availability expected in 2027. So as you know we believe stable coins are going to eat the world. Tokenization is going to eat the world. And I would imagine that Mastercard has looked back in history and been like what happened to Blockbuster video when Netflix came in. Right? Nobody wants to be Blockbuster, including the incumbent payment companies, which is why we're seeing them all go hardcore into stable coin. So, the next story we have today is another government story. US CFDC rebuffs CME legal stance in consequential fight over perpetual futures. You may remember that the CFDC has basically said that perpetual futures should be allowed. We're seeing them all across the board. Khi got Bitcoin perpetual and the CME freaked the f out. They were like, "Bro, slow down. That's better than what we have. Therefore, it must be illegal. There's no way that a better product could possibly exist that we did not innovate on. So, yes, you can trade futures, but they're they expire. Perpetual futures are basically an options futures contract that never expires. It's a great product, something that we've had in crypto for years. It's come to the United States. The CME complained and said that they're going to take it to the Supreme Court. We're going to sue. I'm going to call my mom. She said you can't do it. Right? So, the CFDC basically responded and they were like, "Show me on the doll uh where perpetuals hurt you because there's no evidence that this has hurt the CME." And the CFTC asked for that evidence and there is none. Shocker, right? So, this is just the CFTC responding. That's what the news is here. We do not have an answer on it, but I think it's very clear that we're going to continue to see this battle. Once again, it's like between this the CME and the CFTC and then the companies themselves and then you go to prediction markets, you got the states versus the government. It's an endless battle right now right now for what products are going to be available. Uh, and I think the CIA is going to lose here, right? Just because you don't like it doesn't mean that you can call mommy in the courts to stop it. And our final story today is a how not to invest. Hit it. >> How not to invest. >> How not to invest. >> Here's the news story. Son, nobody's ever heard of this. So that I've been in crypto a long time. Don't know who Sophie is. Sofod sets November 25th deadline for asset withdrawals before mainet shutdown. Users of the zkync base chain have until late November to move funds before bridges and RPC nodes go dark. Dude, nothing scares me more than a dark RPC node. Nobody knows what that means. Nobody knows what that means. Crypto is so dumb sometimes. Okay, so listen the how not to invest. Don't buy any more of this garbage. Uh some chain that you've never heard of that Sophie told you about her nodes. Uh don't buy this stuff, man. Like these chains are just shutting down. Like don't invest in things from previous cycles that even crypto experts have never heard of that apparently have hundreds of millions of dollars probably in assets on them. I mean the team warned assets remaining on Sophie self on chain risk becoming permanently inaccessible. So imagine like you're holding some Sophie token and you didn't happen to follow Sophie token on social media and it comes December and you're like what do I do with my Sophie tokens? And they're like no nothing. They're gone because we decided to shut down our uh decentralized blockchain. Oh man do how not to invest. Don't participate in these things. Yeah, man. JP Morgan coming in 10% going to outperform. I think it'll be 20 25%. But the future uh will tell us. It's all I got for you today. See you tomorrow with Sophie to Sophie Sophiecoin. Peace.