Bitcoin (BTC), the world’s largest cryptocurrency, has been experiencing severe resistance near $30,000 levels over the past weeks, and some industry analysts believe it will continue to fall from here. In aa letter note on May 25, JPMorgan, a Wall Street financial giant remains bullish on Bitcoin, predicting a 28% increase from present prices. JPMorgan analysts indicated in a letter to investors that $38,000 was a “fair value” for Bitcoin. Furthermore, the bank is more bullish about the future of the larger crypto sector. JPMorgan wrote to customers in a note on May 25:
“The past month’s crypto market correction looks more like capitulation relative to last January/February and going forward we see upside for bitcoin and crypto markets more generally”.
Despite all this, JPMorgan has moved Bitcoin and crypto from an “overweight” to an “underweight” rating. The JPMorgan analyst added that “the biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption.”
According to JPMorgan, Bitcoin and cryptocurrency are also among the bank’s recommended “alternative investments”. It stated that Bitcoin and cryptocurrency have seen a greater correction than other asset types such as private debt, private equity, and real estate. The bank’s strategists wrote:
“We thus replace real estate with digital assets as our preferred alternative asset class along with hedge funds.”
Bitcoin and other cryptocurrencies have been severely impacted by the global macroeconomic environment. Investors have been transferring money to risk OFF assets as the Federal Reserve prepares to raise interest rates in the face of rising inflation.
Despite the recent drop, some of the world’s wealthy investors continue to back Bitcoin. Ray Dalio, the billionaire hedge fund manager, has stated that he still believes in Digital Gold Bitcoin as an alternative asset class. Bill Miller, a billionaire, has stated that he is holding on to his Bitcoin assets and has not sold any throughout the current market downturn.
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