JPMorgan: Crypto Market Recovery Is Temporary
Date: 2024-07-22 Author: Gabriel Deangelo Categories: BUSINESS
JPMorgan Chase analysts said the recent gains in Bitcoin and other crypto assets over the past week do not indicate the start of a long-term bullish trend. According to experts, this rise is a short-term phenomenon and the market may soon face a correction. This was reported by The Block.
Inflated Estimates and Real Costs
The company's analysts noted that the current price of Bitcoin, exceeding $67,000, is too high for current market conditions. According to them, the cost of mining the cryptocurrency is about $43,000. At the time of writing, the Bitcoin rate is at $66,814, showing an increase of 12.9% over the past week, according to TradingView.
JPMorgan experts also assessed the difference between Bitcoin and gold taking into account volatility. They argue that these indicators limit Bitcoin's long-term growth potential. In March 2023, JPMorgan Chase said that Bitcoin would not be able to match gold in terms of nominal volume in investment portfolios.
Despite pessimistic expectations in the short term, JPMorgan analysts admit the possibility of the crypto market returning to an upward trend in August 2024. They believe that by this time the impact of payments from the Mt. Gox and the German government's Bitcoin sales will dry up completely, pushing the industry to further growth.
Influence of Political Factors
Experts also paid attention to the political situation in the United States regarding Donald Trump's candidacy in the upcoming elections. In their opinion, Trump’s victory could have a positive impact on the price of Bitcoin and gold. Investors hope that the US government’s rhetoric towards the crypto industry will soften when the head of state changes.
In general, JPMorgan analysts emphasize that the current growth of the crypto market is a temporary phenomenon, and a correction is possible in the near future. However, the long-term outlook remains positive, especially given possible political changes and the end of major market events.
Let us recall that in less than seven months of 2024, Bitcoin whales acquired a total of 1.45 million BTC, which also indicates continued interest in cryptocurrencies on the part of large investors.
