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According to JPMorgan analysts, any rise in cryptocurrencies from here on is not expected to be long-lasting. Analysts also predict that Bitcoin and gold will benefit from a potential second Donald Trump presidency.
JPMorgan analysts note that any rise in cryptocurrency prices will be tactical — temporary and strategic — and not the beginning of a permanent uptrend. It is noted that Bitcoin’s current price is approximately $67,500, while its cost of production is approximately $43,000, and its volatility-adjusted comparison to gold is approximately $53,000.
They note that the difference between Bitcoin’s price and JPMorgan’s volatility-adjusted benchmark to gold indicates mean reversion near the zero line, thus limiting upside potential in Bitcoin prices in the long term. The analyst team led by JPMorgan’s executive director Nikolaos Panigirtzoglou drew attention to these issues in the report they published on Thursday.
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Analysts reiterated that they expect cryptocurrencies to rise again from August. They stated that they expected a recovery after July as liquidations decreased. Bitcoin futures have recently seen Gemini and Mt. They noted that Gox’s performance was weak due to the liquidations of Gox creditors and the sale of Bitcoins confiscated by the German government. They stated that these liquidations will decrease after July and that they expect a recovery in Bitcoin futures from August, which is consistent with the recent increases in gold futures.
“Momentum traders, particularly CTAs (commodity trading advisors), have played a large role in gold futures trading. The momentum signal for gold in July has moved up into overbought territory from last April,” analysts wrote. they said.
JPMorgan on Potential Second Trump Presidency
Bitcoin and gold are expected to benefit from a potential second Donald Trump presidency, according to JPMorgan analysts. Some investors view Trump as more favorable to crypto companies and their regulations than the current Biden administration. Analysts have noted that Trump’s potential trade policies could lead emerging market central banks, particularly the Bank of China, to further diversify into gold.
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