JPMorgan Stays Cautious on Cryptocurrencies Amid Lack of Bullish Catalysts

Featured & Cover JPMorgan Stays Cautious on Cryptocurrencies Amid Lack of Bullish Catalysts

JPMorgan, a leading US bank, has expressed a cautious outlook towards cryptocurrencies in its recent report released on April 23rd. The report highlights several factors contributing to the current state of the cryptocurrency market. One notable observation is the absence of bullish catalysts following a decline in ETF inflows. Analysts at the bank point to various factors amplifying the bearish sentiment, including high market positioning, disappointing venture capital funding, and the associated production costs.

In a previous assessment, JPMorgan suggested that the impact of the Bitcoin halving had already been factored into the market, which tempered optimistic forecasts. This sentiment was echoed back in February when the bank projected a potential drop in Bitcoin’s value post-halving, envisioning a figure as low as $42,000 per coin. Additionally, JPMorgan foresaw a doubling in the production cost of individual coins. During this period, Bitcoin advocate Mike Novogratz also cautioned against an overheated market.

Despite hitting an all-time high of $73,737 in March and achieving eight consecutive months of gains, Bitcoin faced a significant downturn in April, followed by continued declines into May. This downward trajectory was attributed to substantial outflows from ETFs and broader macroeconomic uncertainties. As of the latest update, Bitcoin is trading at $59,110.

Meanwhile, Jamie Dimon, the CEO of JPMorgan, reiterated his longstanding skepticism toward Bitcoin, labeling it as “a fraud” and likening it to a “Ponzi scheme.” Dimon maintained his stance that Bitcoin lacks the fundamental qualities of a viable currency. However, he acknowledged the potential value of blockchain technology despite his reservations about cryptocurrencies.

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