Cryptocurrencies have grown into a huge industry despite the asset class dropping massively last year.

JPMorgan notes that cryptocurrencies would only serve as a hedge in a "dystopia" despite low correlation with other assets.

"Low correlations have little value if the hedge asset itself is in a bear market," the bank said.

Cryptocurrencies went into 2018 looking like an asset on the up, but ended the year by falling spectacularly, driving devotees apoplectic.

Bitcoin, the original cryptocurrency, dropped 80% from its all time high of close to $20,000 in 2018, and according to JPMorgan the asset class probably wouldn't be well served as a hedge against repeated unease in financial markets.

"We have long been skeptical of cryptocurrencies’ value in most environments other than dystopia, characterized by a loss of faith in all major reserve assets (dollar, euro, yen, gold) and in the payments system," JPMorgan analysts wrote in a note dated January 24.

"Their boom-bust cycle is similar to the path of gold in the early 1970s, the Nikkei in the 1980s and technology stocks in the 1990s," the analysts wrote.

However, the fact that cryptocurrencies still have a relatively limited correlation to traditional assets could be a positive for investors seeking to diversify. Despite that, Bitcoin’s co-movement with some markets like US equities and EM Bonds (local currency) has risen slightly since early 2018, but remains quite low, according to JPMorgan.

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"Low correlations have little value if the hedge asset itself is in a bear market," the report said.

The future of cryptocurrencies already looks to be a matter of debate with JP Morgan also recently noting that Bitcoin's price is so low that it's actually worth less than the cost to mine it.