The Wall Street elephant JP Morgan is not convinced by Bitcoin’s recent rally, and it’s issued a warning saying that the BTC price would take a dive soon.
The New York financial giant believes that the recent rally is nothing but a trap for the foolhardy that will mirror, yet again, the boom-bust cycle prevalent in the cryptocurrency’s history.
The premier digital coin faced some tough times during 2018, and even during 2019’s first quarter. Then, since last April 2nd, it’s doubled its price, which has caused a lot of optimism within the cryptosphere about a new bullish run.
Some analysts think that Bitcoin’s surge is caused to the US-China trade war, concerns over the stock market’s performance, dread about Bitcoin’s supply, and many other things. These are usually the reasons quoted by experts behind the increased demand for gold. It makes no sense to use them to explain why something is worthless.
JP Morgan’s analysts believe that the current rise is a false start. Like in December 2017 when Bitcoin’s price almost reached USD 20.000,00 only to plummet without any apparent reason.
“Over the past few days, the actual price has moved sharply over marginal cost,” JPMorgan’s people recorded in a summary that reached Bloomberg. The giant financial institution added,
“This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”
Those conclusions are based on Bitcoin’s “cost of production” as calculated by the Wall Street experts taking into account factors such as electricity costs and computing power.
JP Morgan’s hostile stance towards cryptocurrencies in general and Bitcoin, in particular, is not new. In fact, the bank has been openly skeptic, to say the least about digital assets since it first noticed them. But sometimes that skepticism has turned into attacks. Jamie Dimon, as bank’s officer, is on the record calling BTC “a fraud” in 2017. Then he went back a little by saying that he doesn’t care about it.
Ironically, the bank is launched a digital currency of its own. It went online last February, but the financial giant insists that it’s not a cryptocurrency.
What should you make of JP Morgan’s view on Bitcoin’s value? Probably nothing. The bank is just doubling down on its default posture on Bitcoin. And throwing around a few numbers about power costs and computing power doesn’t mean they’ve nailed the market’s sentiment down.
Outlook
Let’s not forget that Wall Street is populated with the geniuses that gave us all the 2008 global crisis which was so bad that it literally prompted the legendary Satoshi Nakamoto to come up with a financial instrument that would allow us all to do away with Wall Street and the world’s banks. That’s how Bitcoin came about.
Time is the ultimate test. We’re not saying that the next bullish run on the cryptocurrency market is here already. It’s still early to be sure about that, but the signs are encouraging. But even if it’s not, a new bullish market will happen sooner o later, and JP Morgan will fail to see it coming, as usual.
It’s up to you to decide if JP Morgan is right or not on this subject. But before you choose, it would be wise to review the bank’s analysts’ track record when it comes to forecasts in the cryptosphere.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.