JPMorgan’s Cautious Stance on Bitcoin: Positive Catalysts Already Priced In

JPMorgan: Bitcoin and Cryptocurrency Market Catalysts Already Priced InBanking giant JPMorgan suggests that the factors that could potentially drive the price of bitcoin ( BTC) and the broader cryptocurrency market higher are mostly accounted for. The analysts noted that digital asset prices experienced their largest selloff since the 2022 FTX collapse earlier this week. This downturn was mainly attributed to contagion in traditional markets, with bitcoin falling more than 15% before showing some recovery.
The bank’s analysts pointed out that the selloff in cryptocurrencies was primarily driven by retail investors. Additionally, momentum traders contributed to the decline by exiting their long positions and establishing shorts. The rapid correction began after the Bank of Japan raised its benchmark interest rate last week, which led to a stronger yen and the unwinding of the ‘carry trade’—a strategy where traders borrow money in the low-interest rate yen to invest in higher-yielding assets.
While both traditional and digital asset markets have since stabilized, many traders remain apprehensive. On the institutional side, there has been limited to no ‘de-risking’ in the bitcoin futures market. According to JPMorgan, this is evident from the limited open interest and sideways movement in the spot price spread.
The JPMorgan team highlighted a few catalysts that could keep institutional investors optimistic about bitcoin and the crypto sector:
Morgan Stanley wealth advisors offering crypto to their clientsBankruptcy paybacks nearing completionBipartisan support for favorable regulations in the U.S.However, these positive factors seem to be already reflected in the current price of digital assets, according to the bank. ‘With limited de-risking in the CME bitcoin futures space and equity markets still appearing vulnerable, we remain cautious on the crypto market despite the recent correction,’ the analysts noted.
JPMorgan’s cautious stance is not new. The bank has recently stated that any short-term rebound in crypto markets is likely to be temporary, as bitcoin’s price remains elevated relative to its production cost and gold. The bank’s analysts estimate that the average production cost for mining bitcoin is around $49,000. Any price movement below this level would put pressure on miners, further weighing on BTC prices. (Sigorta Haber)

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