JPMorgan issues serious warning on bitcoin: We expect bitcoin price to fall as low as $25,000
Bitcoin had a bumpy ride this week as the world’s most popular cryptocurrency fell as low as $28,600 on the Luxembourg-based Bitstamp exchange before it quickly recovered back to over $30,000. When all the dust settles, bitcoin and other cryptocurrencies including ethereum, Cardano, Dogecoin, and Ripple’s XRP lost hundreds of billions of dollars. Bitcoin is now trading at $32,057.90 as of the time of writing.
There are signs that Bitcoin is trending back up again but the current rally may be short-lived and it’s probably not yet time for crypto investors to start celebrating. According to analysts at Wall Street giant JPMorgan who correctly called the latest bitcoin and crypto sell-off, the price of bitcoin is likely to move lower over the medium term.
In May, JPMorgan said that institutional investors are dumping bitcoin in favor of gold, reversing a recent trend that’s played out over the last two quarters. That’s not all. In a note to clients and first reported by Bloomberg, JPMorgan strategists led by Nikolaos Panigirtzoglou, said that their belief is that Bitcoin’s “fair value” is between a range of $23,000 and $35,000 in the medium term, based on a comparison of its volatility versus gold.
“Despite this week’s correction we are reluctant to abandon our negative outlook for Bitcoin and crypto markets more generally,” said JPMorgan strategist Nikolaos Panigirtzoglou in a note to clients.
Panigirtzoglou added, “Despite some improvement, our signals remain overall bearish.” Meanwhile, based on open interest in CME bitcoin futures contracts, the firm said large investors are shifting away from bitcoin after favoring the digital currency over gold beginning last fall.