JPMorgan: Bitcoin dip isn’t appealing for institutions

Bitcoin price has been struggling to find and maintain anything above $35,000 USD, sitting just above $33,000 USD at the time of writing. In response to the bearish downturn after a few months of weak trading, JPMorgan analysts are anticipating a bearish movement in the market based on Bitcoin and gold volatility ratio.

The bank released a note detailing how and why it suggests that cryptocurrency trading might hit a roadblock, which won’t be attractive to new and current institutional traders. JPMorgan sees fair value of the cryptocurrency over the medium-term range sitting between $23,000 USD and $35,000 USD – a low point based on the currency price. As a result, the bank says that “full convergence or equalization of volatilities or allocations [between gold and bitcoin] is unlikely in the foreseeable future.”

In April, Bitcoin saw a fall from trading at an all-time high to sit at nearly 50% of the value it had seen. Part of this could be attributed to investors trading out to profit, as well as China’s harsh restrictions on the market. The bank noted that this dip, usually attractive to active traders, hasn’t been enticing investors:

“More than a month after the May 19 crypto crash, bitcoin funds continue to bleed, even as inflows into physical gold ETFs stopped. This suggests that institutional investors, who tend to invest via regulated vehicles such as publicly listed bitcoin funds or CME bitcoin futures, still exhibit little appetite to buy the bitcoin dip.”

China’s crackdown overall good for the cryptocurrency market

While China’s strong stand on Bitcoin trading and mining has been a possible factor in the decline of Bitcoin, the bank has said that it right be better for the longer-term health of the market. In the note, it stated:

The crackdown on mining operations in China should be considered as positive for bitcoin over the medium-term as it accelerates a shift away from China’s high share in bitcoin’s hash rate, reducing concentration.

The sentiment has been shared by former Gemini engineer Brandon Arvanaghi who thinks that China’s restrictions are an incredibly bullish sign for the technology and the advancement of the industry.

Related Articles

Should Beijing look at its crypto ban? A former bank member believes so

A former member of the Monetary Policy Committee at the People’s Bank of China believes the ban on China should be reconsidered.

United Kingdom riddled with crypto scams

Owing to the lack of regulation and restriction in the United Kingdom, fraudulent companies have been flocking to the country.

US lawmakers seek answers from Silvergate about FTX link

United States senators have requested information from Silvergate Capital regarding the firm's association with FTX.

Bitcoin value in Nigeria surges as cash-free society initiative expands

The adoption rate of cryptocurrency in Nigeria hits new highs and the price of Bitcoin has hit a more than 60% premium.

See All