JPMorgan claimed that institutional investors abandoned Bitcoin and returned to gold. America’s largest bank stated that following the cryptocurrency’s slump last week, these investors have become nervous and are returning to gold, a more stable store of value. However, despite the downturn in the market, the bank still believes that Bitcoin will reach $ 140,000 in the long run. Details are in our news.
Institutional investors have been cited as the main drivers of Bitcoin’s rally, which hit an all-time high of over $ 64,000 in April. The Wall Street giants have started looking at Bitcoin as a viable investment this year and have poured billions of dollars into the asset. Names such as Tesla, Microstrategy and Square were quite open to the public on this issue.
However, JPMorgan claims that this trend may come to an end. The bank pointed to the decline in open interest data on Bitcoin futures contracts on the Chicago Mercantile Exchange. This development was the first time BTC futures saw a decline in the stock market since the bull market started in late 2020. JPMorgan analysts stated the following in the investor’s note:
“Institutional investors have seen that the upward trend that has been going on for perhaps two quarters is over and they have moved away from the rapid decline in digital gold and turned towards the stability of traditional gold. Or they saw that the price of Bitcoin was too high compared to gold, and they started doing the opposite of what they had done for the last two quarters, selling Bitcoin to buy gold. ”
However, despite the market collapse, JPMorgan still maintains its $ 140,000 price target for BTC. The bank made this estimate in January when the crypto was traded at around $ 30,000. At the time, he claimed that Bitcoin surpassed gold as an alternative investment. JPMorgan believes Bitcoin can meet this goal, but probably won’t in 2021.
At a separate event, Joyce Chang, head of global research at JPMorgan, cited extreme volatility in crypto as the main reason many institutional players still stay out of the market. To attract these players, “volatility has to decrease. You are currently looking at four times the volatility of gold and stocks. This makes it a barrier for many corporate treasury and institutional investors, ”he said.