Analysts at the world’s top bank JPMorgan Chase & Co. suggested that Bitcoin’s bull run will end in disappointment if its volatility does not decrease.
According to a Feb. 17 Bloomberg report, a team of JPMorgan strategists led by market strategist Nikolaos Panigirtzoglou wrote that Bitcoin’s bull run “looks unsustainable” in a note. The bank’s researchers said that the Bitcoin network’s market value increased by about $700 billion over the last five months despite an institutional capital inflow of only $11 billion. The note suggests that ongoing growth lacks a stable foundation:
“Movements since January this year appear to have been more influenced by speculative flows.”
Bitcoin’s limited supply of 21 million and growing retail sales may also be pushing bitcoin’s price up. One of the reasons retail sales could grow substantially this year is payments processor PayPal. The company has had great success since adding the ability to buy and hold several cryptocurrencies in account holders’ wallets in the U.S., and is set to expand that service to other countries, starting with the U.K.
Bitcoin’s price just broke $50,000 for the first time ever in the last 24 hours after having rallied for most of this year amid news of institutional adoption. As Modern Consensus reported earlier this month, famous investor Raoul Pal said that Bitcoin is “basically eating the world” and explained:
“Bitcoin is destroying all other assets in the world, and I have never seen this before in my career where an asset has drawn the attention of the likes of Elon Musk and mainstream institutions like no other asset.”
Institutional Bitcoin adoption is another reason why many expect that a Bitcoin ETF will soon be approved in the United States, allowing for further consolidation of this new asset class. The change from anti-Bitcoin SEC Chairman Jay Clayton to new acting SEC chairman Gary Gensler, who taught blockchain and digital assets at MIT, is another.