JPMorgan Analysts Doubt Sustainability of Crypto Market Recovery
According to JPMorgan analysts, any recent rebound in cryptocurrency prices should be viewed as tactical rather than the start of a lasting upward trend.
The analysts cast doubt on the sustainability of the current crypto market recovery, suggesting that the surge in prices may be temporary.
In a report released on Thursday, the analysts highlighted the disparity between Bitcoin’s current price of approximately $67,500 and its production cost of around $43,000.
They also compared Bitcoin’s volatility-adjusted value to gold, which indicated a value of around $53,000.
This significant difference, according to JPMorgan, suggests a mean reversion around the zero line, limiting the potential for significant upside in Bitcoin prices over the long term.
The analysts noted that the current liquidations in the crypto market, including those by Gemini, Mt. Gox creditors, and the German government’s sale of seized Bitcoins, have contributed to the recent weakness in Bitcoin futures.
However, they anticipate a decrease in liquidations after July, leading to a rebound in Bitcoin futures from August.
This projection aligns with the observed increase in gold futures.
Interestingly, JPMorgan analysts also suggested that both Bitcoin and gold could benefit from the potential re-election of former President Donald Trump.
They explained that some investors perceive Trump as more favorable towards crypto companies and regulations compared to the current Biden administration.
Furthermore, Trump’s potential trade policies could prompt emerging market central banks, particularly China’s central bank, to diversify their holdings by increasing their investments in gold.
This comes as Trump has seen growing popularity among the crypto community comes as
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