Another day, another price prediction. They are coming thick and fast at the moment as analysts and industry observers scramble to predict where the bottom will be. Some are more optimistic than others, but it is to be expected that JP Morgan is firmly on the pessimistic side of the fence.
JP Morgan Predicts More Pain
Yesterday we took a look at fractal patterns to predict a bottom of around $2,500 for Bitcoin which is quite plausible given the current market lethargy. That low is only a thousand dollars away from today’s price and would involve another 30% dump similar to the one in mid-November.
According to Reuters however JP Morgan, never a proponent of Bitcoin or cryptocurrency, has predicted a bottom of $1,250 if the bear market persists. The Wall Street banking behemoth added that blockchain technology has been widely hyped and will not make any difference to banking for the next three to five years.
JP Morgan has been among the large financial institutions that are very skeptical of Bitcoin and its brethren. This really comes as no surprise as their business model involves making a lot of money out of other people’s money, and decentralized peer to peer currency is a huge threat to that.
Analysts from the bank added that crypto assets would only gain traction when all faith in traditional assets such as the dollar, gold and the global payments system has been lost. If recent reports are anything to go by, Trump’s government shutdown and war on trade could accelerate that loss of faith in the greenback.
In a report on crypto and blockchain it said “Even in extreme scenarios such as a recession or financial crises, there are more liquid and less-complicated instruments for transacting, investing and hedging,” adding that institutional participation in crypto markets has slipped over the past few months. What it failed to acknowledge is the queue of major institutions waiting to get their crypto products on the table getting stymied by the US government blackout.
The report continued stating that it was unable to pinpoint any major retailers that accepted cryptocurrencies in 2018 and that its intended purpose remains ‘challenged’. It seems that JP Morgan does not consider Overstock, Newegg and Microsoft ‘major enough’ then.
The $1,250 BTC prediction is a bold one but with no real analytics or technical indicators to back it up, the report can just be considered as further FUD from Wall Street’s banking monopolies. That said, a number of analysts have used indicators to make their predictions and most are of the opinion that Bitcoin has further to fall before it recovers.
Photo via Shutterstock.