JPMorgan rules out "crypto winter" and says Bitcoin could still appreciate

Source: PortaldoBitcoin Original Title: JPMorgan dismisses “crypto winter” and says Bitcoin may still appreciate Original Link: JPMorgan analysts signaled on Tuesday (9) that Bitcoin and other cryptocurrencies still have room for appreciation, despite fears caused by Bitcoin’s sharp decline last month.

Although some observers may be convinced that cryptocurrency prices are about to suffer a prolonged drop after Bitcoin fell to US$81,000 last month, the investment bank does not foresee the so-called “crypto winter” on the horizon.

“The wave of sell-offs last month generated concerns in the media and among crypto markets that the crypto ecosystem might be entering a new crypto winter,” they wrote. “While we do not foresee the end of the current bull cycle, we acknowledge that this November correction was significant.”

“Overall, we find it difficult to see these recent market pullbacks as emblematic of broader structural degradation within the crypto ecosystem, and therefore, we remain optimistic about this sector,” the analysts wrote.

They noted that Bitcoin ended the month down 9% from its January starting price, marking a first annual decline in the asset’s price since May 2023. On Tuesday, Bitcoin was trading about 1.5% below the US$93,000 mark; this Wednesday morning, close to US$92,000.

Over the past year, Bitcoin’s price also fell 5%. Still, JPMorgan analysts acknowledged that digital asset prices were “immediately inflated after the 2024 US general elections,” along with the re-election of President Donald Trump.

With over 20% contraction in the market capitalization of various tokens, analysts reported that trading volumes also suffered a considerable impact. Nonetheless, they highlighted the “resilience” of stablecoins, whose total volume increased for the 17th consecutive month despite volatility.

Crypto optimism remains strong

The most recent JPMorgan note is significant because it effectively points to the end of the four-year cycles that Bitcoin’s price historically followed. This dynamic has been associated with Bitcoin’s so-called halving, but the market for the cryptocurrency has changed drastically in recent years.

Huge drops, however, seem unlikely to happen again, according to Eric Balchunas, senior ETF analyst at Bloomberg Intelligence: “Those investing in Bitcoin through exchange-traded funds (ETFs) are ‘more stable investors,’ which should lead to ‘more stable prices,’” he said at the time.

The same sentiment was reiterated in a note from the British multinational bank Standard Chartered on Tuesday, which highlighted expectations of looser monetary policy from the Fed, the US central bank. However, the bank also acknowledged that inflows into spot Bitcoin ETFs have recently decreased.

“This time, it’s really different,” wrote Geoffrey Kendrick, the bank’s head of digital assets. “We believe crypto winters are a thing of the past.”