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JPMorgan analysts assert that any recent increase in cryptocurrency values should be regarded as tactical rather than indicative of a sustained upward trajectory.
The analysts expressed skepticism regarding the durability of the ongoing recovery in the crypto market, implying that the rise in prices may be short-lived.
In a report published on Thursday, the analysts pointed out the gap between Bitcoin’s current price of roughly $67,500 and its production cost, which is about $43,000.
Bitcoin’s Volatility-Adjusted Value to Gold Suggests $53,000
They also evaluated Bitcoin’s volatility-adjusted value in relation to gold, which suggested a valuation of approximately $53,000.
This notable discrepancy, according to JPMorgan, indicates a tendency for mean reversion around the zero line, thereby constraining the potential for significant long-term gains in Bitcoin prices.
The analysts observed that the current liquidations within the crypto market, including those from Gemini, Mt. Gox creditors, and the German government’s sale of confiscated Bitcoins, have contributed to the recent decline in Bitcoin futures.
Nevertheless, they expect a reduction in liquidations following July, which could lead to a recovery in Bitcoin futures starting in August.
This forecast aligns with the observed rise in gold futures.
Notably, JPMorgan analysts also proposed that both Bitcoin and gold might gain from the possible re-election of former President Donald Trump.
They noted that some investors view Trump as more supportive of crypto firms and regulations compared to the current Biden administration.
Additionally, Trump’s potential trade policies could encourage emerging market central banks, especially China’s central bank, to diversify their reserves by increasing their gold investments.
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This observation comes as Trump has gained popularity within the crypto community, reflecting a significant shift in his stance on cryptocurrencies recently.
The former president has even criticized Biden for his stringent approach to cryptocurrencies, stressing that the United States should aim to lead in the crypto sector.
Decline in Bitcoin Addresses Suggests Possible Rebound
As reported, the quantity of Bitcoin wallet addresses holding BTC has been declining over the past month, according to data from on-chain analytics firm Santiment.
While this may initially appear alarming, Santiment posits that it could actually signal positive news for investors.
“When we observe mass liquidations like this, the likelihood of a continued rebound only increases,” the firm stated.
Simultaneously, there has been a decrease in the percentage of Bitcoin supply that is profitable, currently at 89.43% according to Glassnode data.
While this might seem discouraging, other indicators present a more optimistic outlook.
In a recent update, CryptoQuant founder Ki Young Ju highlighted that over-the-counter (OTC) markets are currently overshadowing centralized exchange markets, suggesting institutional accumulation.
Large whale wallets, including spot ETFs and custodial wallets, have accumulated 1.45 million BTC this year, representing about 9% of the circulating supply.
The weekly inflow to these whale entities has exceeded the total for the entire year of 2021, with an impressive 100,000 BTC entering each week.
Despite a decline in trading volume on centralized crypto exchanges for the third consecutive month, Bitcoin spot markets have seen a recovery, gaining 12% over the past week.
The post JPMorgan Analysts Doubt Sustainability of Crypto Market Recovery appeared first on Cryptonews.
