Michael Cembalest: JPMorgan Asset Manager Talks Crypto

High-profile JPMorgan asset manager Michael Cembalest spoke about the cryptocurrency market in a recent Eye On the Market podcast episode. Cembalest talked about how JPMorgan is bearish on Bitcoin.

What are Cembalest’s views on crypto and how did he come to his conclusions? Let’s dig into this, plus how he got to be an expert and what his net worth might be.

In a podcast and report called Maltese Falcoin, Cembalest spoke about JPMorgan’s views on Bitcoin and other cryptocurrency.

Cembalest’s biggest qualm with Bitcoin is that not enough people use it. Without extensive use, its store of value is weak and not reliable. Also, Cembalest said, “My take on this is obviously less optimistic than a lot of the people that inhabit the crypto and blockchain world fulltime, as you can tell from the title of the piece.”

The name is a reference to the 1941 film starring Humphrey Bogart The Maltese Falcon, which tells the story of people on a quest to acquire a rare collectible that ultimately proves to be worthless.

In the report, Cembalest recognizes “Central Banks and Treasuries have created a massive confidence void, and it would have been strange if some alternative to fiat money didn’t appear on the scene.”

He also said, “Bitcoin’s volatility continues to be ridiculously high, and its volatility often rises when equity market volatility is rising too. Just as importantly, I don’t have a valuation model to apply to Bitcoin or other cryptocurrencies and I’m unconvinced by ones I have seen so far.”

Cembalest specifically points out risks like miners attacking or front-running exchanges, cartel involvement, frequent inflation bugs, regulatory hurdles, and hacking or theft.

While largely bearish on crypto, Cembalest isn't surprised that it has evolved this way given market and economic conditions over the last decade and a half.

Cembalest is the Chairman of Market and Investment Strategy for JPMorgan Asset Management. He leads the firm’s strategic market and investment insights.

Cembalest previously served as the JPMorgan Global Private Bank chief investment officer and the company’s Investment Management fixed income division head. He has been a JPMorgan employee since 1987.

Cembalest's expertise doesn’t necessarily fall under the cryptocurrency umbrella, but his broad market knowledge makes him an asset expert. Also, he’s reliable in a unique way. In 2011, reports surfaced that Cembalest’s team at JPMorgan Global Wealth was the only division that refused to do business with convicted Ponzi scheme conman Bernie Madoff.

Cembalest has been climbing the ranks at JPMorgan for 35 years. While his pay might not be akin to CEO Jamie Dimon’s newly upped $34.5 million annually, it’s likely impressive.

On average, a JPMorgan Chase & Co executive makes $208,963 a year. Considering a high salary and a decades-long history of investing, Cembalest is likely a millionaire (to say the least).