Updated 09 Jun, 2021

JP Morgan Says Big Investors are Holding Back due to Volatility

big investors


Key Takeaways:

  • JPMorgan releases a research note to clients, saying Bitcoin is shunned by big investors
  • The investment bank forecasts bitcoin in the $24,000 to $36,000 range in the medium-term


A JP Morgan Analyst Explains Why Bitcoin’s Price Remains Pressured Under $40,000

JPMorgan, a US investment banking giant has been closely monitoring the crypto space for a while now. Recently published, their new report claims that in the short-term and the medium-term, large-scale investors are not buying the dip in Bitcoin’s price. This is due to the lingering uncertainty and the heightened volatility.

“It now seems unlikely that we see this volatility ratio returning to the x2 levels of last summer. The best we can hope for over the medium term is for this volatility ratio to partially revert from around x6 currently to around x4 by year end,” said JPMorgan strategist Nikolaos Panigirtzoglou said, as quoted by CNBC.

The price of Bitcoin remains pressured under the $40,000. As market participants have not been able to push it substantially higher after the major market meltdown. In mid-May, a solid crash erased over $500bn from the crypto market on news of renewed warnings from China that regulators could crack down on crypto mining and trading.

“There is little doubt that the boom-and-bust dynamics of the past weeks represent a setback to the institutional adoption of crypto markets and in particular of Bitcoin and Ethereum,” said the JPMorgan strategist in a note to clients. In May, Bitcoin dropped over 37%, making the period one of the worst months to date for the largest digital currency.

JP Morgan Predicts Bitcoin Could Decline Further to $24,000 to $36,000

“We note that the mere rise in volatility, especially relative to gold, is an impediment to further institutional adoption as it reduces the attractiveness of digital gold vs. traditional gold in institutional portfolios.” The research note describes that the bank sees medium-term fair value for Bitcoin to gravitate in the range between $24,000 to $36,000 per coin.

JPMorgan has been actively following the developments in crypto land this year. Moreover, they have even predicted Bitcoin’s price could break above $146,000. The investment firm is now considering whether to begin offering bitcoin-related services due to increased client demand. JPMorgan CEO Jamie Dimon, however, is still not convinced in the potential of digital assets. He recently said in an interview with the Wall Street Journal he is not a “bitcoin supporter.”

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