Any Near-Term Rebound in Crypto Market Likely to be Temporary: JPMorgan

The bank said the recovery in the cryptocurrency market is expected to be temporary.

JPMorgan said the price of Bitcoin is still too high compared to its production cost and gold.

The report stated that Bitcoin and gold are also expected to benefit as Trump is likely to win the election.

JPMorgan (JPM) stated in a research report published last week that any near-term recovery in cryptocurrency markets will be tactical in nature and will not be the start of a new long-term uptrend.

The bank said this is because the price of bitcoin {{BTC}} is currently too high compared to its $43,000 production cost and its $53,000 volatility-adjusted comparison to gold. Bitcoin was trading around $67,220 at press time.

JPMorgan notes that momentum in bitcoin futures has been weak in recent weeks due to BTC liquidations by Gemini, Mt. Gox creditors, and the German government.

Liquidations are expected to ease this month, with the bank continuing to look for a recovery in Chicago Mercantile Exchange (CME) bitcoin futures in August.

Bitcoin and gold are expected to benefit from Trump’s higher probability of winning the election. “Some investors think that a second Trump presidency would be friendlier to crypto companies and crypto regulations, unlike the current Biden administration,” analysts led by Nikolaos Panigirtzoglou wrote.

There is speculation that Trump could announce Bitcoin as a strategic reserve asset at a Bitcoin conference in Nashville this weekend, which according to 10x Research founder Markus Thielen, could “cause a parabolic rise in the price of Bitcoin.”

Read more: Crypto Market Expected to Revive in August, Liquidations to Complete by End of July: JPMorgan