The cryptocurrency market has seen another surge, led by the leading cryptocurrency, Bitcoin. However, JPMorgan analysts suggest that any crypto recovery from this point is unlikely to be long-lasting. They also anticipate that both Bitcoin and gold could benefit from a potential second Donald Trump presidency.
Bitcoin and Altcoin Price Recovery Might Not Be Sustainable
As followed on Kriptokoin.com, the crypto market gained an upward momentum last week. However, whether this trend will continue remains uncertain. JPMorgan analysts indicate that any recovery in crypto prices from this point is more likely to be tactical (temporary and strategic) rather than the beginning of a lasting upward trend. They point out that the recent surge in Bitcoin’s price around $67,500 is high compared to its production cost of approximately $43,000 and its volatility-adjusted comparison with gold around $53,000.
Led by General Manager Nikolaos Panigirtzoglou, JPMorgan analysts noted in a report released on Thursday that the difference between Bitcoin’s price and JPMorgan’s volatility-adjusted gold comparison “suggests a mean reversion around the zero line, thus limiting any long-term upside potential for BTC prices.”
Crypto Recoveries Expected from August Onwards
Analysts reiterate that crypto recoveries are expected from August as liquidations decrease after July. They attribute the recent weakness in Bitcoin futures to liquidations by Gemini and Mt. Gox creditors, as well as the German government’s sale of seized BTC. Analysts expect these liquidations to likely decrease after July, leading to a recovery in Bitcoin futures, in line with the recent increases seen in gold futures from August onwards. They state:
JPMorgan Comments on Potential Second Trump Presidency
According to JPMorgan analysts, Bitcoin and gold are expected to benefit from a potential second Donald Trump presidency. Analysts suggest that some investors view Trump as more favorable for crypto companies and regulations compared to the current Biden administration. They also add that Trump’s potential trade policies could increase the inclination of emerging market central banks, particularly the People’s Bank of China, towards gold.
Conclusion
The cryptocurrency market continues to show dynamic movements, with various factors influencing price trends. Staying informed about these developments is crucial for investors and enthusiasts.
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