New York-based American multinational investment bank JPMorgan Chase has released
New York-based American multinational investment bank JPMorgan Chase has released a warning saying that the slump in the prices of Bitcoin in 2018 may have scared away institutional investors. Paradoxically, the crypto community was long waiting for institutional investors to enter the crypto markets and spark off a bull run with the injection of cash.
2018 was a difficult year for cryptocurrencies. As much as 80% of the value of Bitcoin was wiped away. Its rival cryptocurrencies also faced the same fate. Earlier this week, Bitcoin touched the yearly low of USD 3,200.
Even though the world’s largest cryptocurrency (by market capitalization) has bounced back today climbing up to USD 4,000, Bitcoin buyers are finding it hard to be reassured because they have reeled under the bear market trend for over a year now.
The price of Bitcoin touched the all-time high of USD 20,000 in December 2017. Since then the cryptocurrency has been witnessing a free fall through most of 2018. Hard fork of Bitcoin Cash in November 2018 caused traders to panic; subsequently, the prices of Bitcoin saw a further decline.
The analysts at JPMorgan Chase have been quoted as saying,
“Other cryptocurrencies continue to suffer disproportionately during this correction phase. Prices have declined to a point where mining is becoming uneconomical for some miners, who have responded by turning their mining rigs off.”
With mining of Bitcoin becoming uneconomical, many crypto naysayers are arguing that the end of Bitcoin could be near. Bitcoin bulls, on the other hand, are confident about the fate of the cryptocurrency. As per the bulls, developments in the future could spark off a rally.
Interestingly, new firm Bakkt is is set to facilitate Bitcoin futures trading in the first quarter of 2019. Bakkt is backed by big names such as Intercontinental Exchange, Microsoft, Starbucks, and Boston Consulting Group.
Mike McGlone from Bloomberg Intelligence, who had predicted the recent Bitcoin price surge, has commented on JPMorgan’s research saying,
“Sharp rallies should be expected as the market is extremely oversold by most metrics. Record shorts and extreme discounts to most moving averages.”