Bitcoin (BTC) Might Drop to $1,260, JPMorgan Says
US banking giant JPMorgan has concluded that the value of cryptocurrencies remains unproven to this day.
JPMorgan analysts have concluded that the value of digital currencies like Bitcoin (BTC) is unproven, as reported by Reuters. BTC, which was trading at around $3,585 in the early afternoon on Friday, will probably hit the support level at $2,400. If the bearish sentiment continues, the price could slide to about $1,260, which is the lowest level since April 2017, according to the bank.
Moreover, JPMorgan is not convinced of the merits of the underlying technology either. There is too much hype around blockchain, and the technology will not prove to be a game-changer in the next three to five years, according to the analysts’ report on cryptocurrencies and blockchain.
The conclusions of the largest US bank come at a time when the crypto market is struggling to revive prices after shedding more than half of its value since last November. Since the start of 2018, BTC has lost over 75% of its value, which put many investors off considering digital assets as a reasonable investment option.
However, market participants were hoping to see at least the distributed ledger technology widely implemented and having a global impact, which has not proved to be the case for now, JPMorgan says.
The value of cryptocurrencies might jump again only if investors lost all confidence in the US dollar, gold, and other traditional assets – a dystopian and nearly impossible scenario, according to the analysts.
“Even in extreme scenarios such as a recession or financial crises, there are more liquid and less-complicated instruments for transacting, investing and hedging,” the report notes.
Many cryptocurrencies have failed to become useful as a payment method, with most retailers refusing to accept digital coins.
As for blockchain, trade finance might be the main beneficiary of the technology. Interestingly, JPMorgan itself is providing DLT solutions, especially via its Quorum platform.