In recent days, cryptos have mostly experienced an increase in their prices. While bitcoin (BTC), for example, has broken the $35,000 resistance, many analysts see this as signs of a return to the bull market. Not those of the banking giant JP Morgan which tempers speculation around this question.
JP Morgan cautious about the return of a supposed crypto bull run
The famous American bank JP Morgan is going against the tide of speculation regarding the bullish trend of the crypto market. Speaking on the subject this Thursday, November 9, its analysts indicated their skepticism about this exciting dynamic.
According to these experts, there is no reason to rejoice in the recent bullish movement of cryptos which is, according to their analysis, completely exaggerated. The reason for their conclusion lies in two elements that must be kept in mind.
The first concerns the prospect of a bitcoin spot ETF being approved. JPMorgan analysts recognize that the latter acts as an important engine capable of attracting new capital. But make no mistake. Because, instead of an influx of new funds, existing capital could simply flow from established bitcoin products to newly approved ETFs.
The second relates to crypto regulations. According to JPMorgan experts, the observed upward trend in crypto prices is linked to the perception of SEC legal setbacks against Ripple and Grayscale. However, these apparent victories for the crypto industry in no way indicate that the regulatory relentlessness against the sector will ease. As a result, they are not optimistic about a significant reduction in regulatory oversight, especially given recent memories of the FTX fraud. Which, one imagines, could have perverse effects.
JP Morgan, skeptical about the bullish prospects of the crypto market?
Overall, JPMorgan analysts do not believe in the idea of a crypto market recovery. This would ultimately be nothing more than an exciting trompe-l’oeil. They are even more pessimistic regarding the projection that the halving of bitcoin, planned for 2024, would positively affect the price of cryptos.
If they reject the validity of this anticipation, it is for a reason. The one which consists of saying that the impact of the event has already been taken into account. For them, the predictability of halving means that its effects on the production of the asset are integrated into the current valuation of the asset.
“This argument is unpersuasive because the bitcoin halving event and its effect are predictable and, in our view, well priced into the bitcoin price,” said the specialists. Their calculation is that the cost of producing bitcoins after the halving, estimated at $43,000, would currently correspond to a 20% decline in the hash rate.
Ultimately, JPMorgan analysts take a cautious stance on the future of the crypto market. A posture motivated by their skepticism with regard to the factors behind the so-called recovery that we are currently seeing.
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