Banking and finance conglomerate JP Morgan is singing the praises of Bitcoin as an investment, and informing its clients of the potential benefits a cryptocurrency can produce. In a February report entitled 'Decrypting Cryptocurrencies: Technology, Applications and Challenges', the financier reinforces the legitimacy of digital currencies and suggests that Bitcoin investments could diversify and improve an investment portfolio.The report identifies three key areas where Bitcoin-based ETFs could benefit investors, and suggests that the cryptocurrency itself would also benefit from moving out of the unregulated, uninsured exchanges and into exchange traded funds. These Bitcoin ETFs would be the "holy grail" all investors are seeking, notes JP Morgan.The financial group notes that "investors need wallets to trade the physical Bitcoins today, making it hard to access. ETFs are frequently traded and highly accessible via investors’ brokerage accounts." Better access to Bitcoin investments is crucial due to the liquid nature of cryptocurrencies: change happens quickly, and traders should prepare for a very active market that requires a good deal of input and monitoring. Reducing risk through introducing Bitcoin EFTs is another key aim of the report. "ETFs are traded through brokerage accounts that carry with them insurance," says the banking institution. "Bitcoin exchanges have no such insurance and expose holders to potential fraud and theft." Bitcoin's anonymous transactions and unregulated exchanges are currently open to risk, with high value theft occurring at exchanges - and limited recourse to recover any losses.Bitcoin remains an unstable currency, and migration to Bitcoin futures exchanges can only mitigate some of the risks associated with cryptocurrency investment. Despite the risks, investors - especially millennials - are keen to snap up digital currencies for their own portfolios. Some financial institutions are already seeking approval to establish Bitcoin ETFs: JP Morgan is likely to be among them. Fans of Bitcoin, Ethereum and the like are hoping that establishing trading centers for digital currencies changes the view of creditors and financiers, as many have banned purchases of Bitcoin using credit cards. If some leading financial institutions are willing to accept Bitcoin as legitimate, this should curb unfair practices in the future.