JP Morgan analysts say institutional investors dump Bitcoin for gold

JPMorgan still sees $140,000 as a long-term theoretical target for the price of Bitcoin.

Author: HELEN PARTZ | Compiler: Maya | Source: Cointelegraph Chinese

As bitcoin hit a five-month low near $30,000, analysts at JPMorgan suggested that large institutional investors are now dumping bitcoin in favor of gold.

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In a note to clients on Tuesday, JPMorgan hinted that institutional investors are fleeing gold, reversing the major bullish cryptocurrency market action that pushed bitcoin above $64,000 in mid-April.

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Citing open interest data on CME Bitcoin futures contracts, the big U.S. bank said BTC futures are now seeing their first biggest drop since the bull market that began in late 2020.

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“Bitcoin liquidity conditions continue to deteriorate and point to continued underweighting by institutional investors. Over the past month, the bitcoin futures market has experienced the steepest and most sustained liquidation since bitcoin’s rise that began in October last year.”

Despite pointing to gold’s latest trend reversal relative to Bitcoin, JPMorgan is sticking to its previous forecast that Bitcoin could hit $140,000 in the long-term. “This $140,000 price should be considered a long-term theoretical target, assuming bitcoin volatility converges with gold volatility and investors’ portfolio allocations to bitcoin match gold allocations,” New The investor statement reads.

According to JPMorgan, based on Bitcoin’s volatility relative to gold, the current fair value of Bitcoin would be a quarter of $140,000, or $35,000.

In January, analysts at JPMorgan predicted that bitcoin could evolve into a compelling alternative to gold and reach $146,000 in the long-term. “Volatility between bitcoin and gold is unlikely to converge quickly and in our view is a multi-year process,” JPMorgan noted.

JPMorgan's comments came as bitcoin suffered one of the craziest historic blows of the day, dropping from intraday highs above $43,000 to below the $32,000 price mark. The world's largest cryptocurrency has rebounded since then, with bitcoin trading at $37,137 at the time of writing, down around 16% over the past 24 hours. As the market bloodbath continues, BTC is still up nearly 300% over the past year and is now trading at levels seen in mid-January.

This article only represents the author's personal opinion, does not represent the position of the blockchain pencil, does not constitute investment advice, and the content-zce is for reference only.

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