According to JPMorgan, any near-term recovery in the cryptocurrency market is only a transient action and not the beginning of a sustained rising trend. Multiple rationales for the bank’s belief were provided in its most recent research report.
The study made the point that, given its production cost of approximately $43,000, the price of Bitcoin is currently excessively high. Upon the publishing of the report, the price of bitcoin was approximately $67,220. Analysts at JPMorgan observed that the price of Bitcoin is likewise excessive when compared to the $53,000 volatility-adjusted price of gold.
Liquidations and market momentum
The recent liquidation proceedings of Gemini, Mt. Gox, and the German authorities are among the factors contributing to the weak momentum in Bitcoin futures. The market has been under pressure as a result of these liquidations.
JPMorgan anticipates that these liquidations will conclude this month, which could provide some brief relief. As August approaches, the bank is also anticipating a reversal in the positioning of Chicago Mercantile Exchange (CME) Bitcoin futures.
They think that the market might receive some short-term assistance from this. The bank also noted that if former President Donald Trump wins the next election, both Bitcoin and gold are probably going to gain. According to JPMorgan:
According to JPMorgan, Compared to the current Biden administration, some investors view a second Trump presidency as more friendly towards crypto companies and towards crypto regulations.
Jamie Dimon’s peculiar connection to cryptocurrency
Since at least 2014, Jamie Dimon, the CEO of JPMorgan, has consistently expressed his disapproval of cryptocurrencies, particularly Bitcoin. He has frequently questioned the purpose and underlying worth of cryptocurrencies.
Jamie has called Bitcoin a “hyped-up fraud” and a “pet rock.” He referred to Bitcoin as a “fraud” and likened it to the tulip bulb bubble in 2017. The possibility that cryptocurrency will be utilized for illicit purposes is another one of his complaints.
He has brought attention to the use of cryptocurrency in sex trafficking, fraud, tax evasion, and anti-money laundering on numerous occasions.
Jamie has been a big supporter of stringent regulation of the cryptocurrency business since he believes that these unlawful activities amount for $50-100 billion in annual transactions. He declared in 2023 before a Senate hearing that he would “close it down” if he were in charge.
Jamie believes that the blockchain has value, notwithstanding his dislike of cryptocurrencies. He acknowledges the promise of blockchain technology to transmit money and data efficiently.
Through programs like the JPM Coin, a digital currency backed by dollars that is used for client transactions, JPMorgan has even embraced blockchain technology.
Remarkably, Jamie has reportedly altered his opinion on cryptocurrency, according to President Donald Trump. You ask Jamie Dimon, Trump remarked. Jamie was, you know, really pessimistic, but now he seems to have somewhat modified his attitude.
