Saturday, May 21, 2022
Home Crypto News Market Main Reasons Why JPMorgan Lowered Its Long-Term Bitcoin Price Target Of $150,000...

Main Reasons Why JPMorgan Lowered Its Long-Term Bitcoin Price Target Of $150,000 To $38,000

- Advertisement -

Institution interest in Bitcoin is decreasing because of high volatility in Bitcoin prices.

Maintaining high volatility is limiting institutional adoption of bitcoin, JPMorgan noted. Business Insider writes that JP Morgan lowered its long-term BTC prediction from $150,000 to $38,000.

“Our previous projection that the bitcoin to gold volatility ratio will fall to around 2x later this year seems unrealistic. Our fair value for bitcoin based on a volatility ratio of bitcoin to gold of around 4x would be 1/4th of $150,000, or $38,000.”

JPMorgan specialists noted that the current 50% pullback from the all-time high in November highlighted the nature of the boom-bust cycle (The boom and bust cycle describes alternating phases of economic growth and decline typically found in modern capitalist economies.), which is an obstacle for institutions to add BTC to their portfolio.

JPMorgan’s prior $150,000 target assumed convergence of bitcoin volatility to that of gold, and equalization of bitcoin allocations to that of gold in investor portfolios. The latest wave of selling in Bitcoin cast doubt on its diversification properties, as BTC went in tandem with the decline in the stock market, analysts added.

“The biggest challenge for bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” JPMorgan said.

JPMorgan did not rule out a further decline in bitcoin prices amid no signs of the capitulation of buyers.

“The open interest across futures contracts and the amount of bitcoin or ether held on exchanges, are pointing to the less panicky or abrupt unwinding of positions than last May in particular with respect to larger crypto investors. In turn, this implies that this month’s corrections look less like capitulation relative to last May,”

- Advertisement -


The content is for informational purposes only and may include the author’s personal opinion, and does not necessarily reflect the opinion of TheCryptoBasic. All Financial investments, including crypto, carry significant risk, so always do your complete research before investing. Never invest money you cannot afford to lose; the author or the publication does not hold any responsibility for your financial loss or gains.

Albert Brown
Albert Brown is a cryptocurrency investor and journalist who has been in the nascent space since 2017. His love and passion for technological innovations made him delve deeper into the world of blockchain and cryptocurrencies. As a journalist, Brown has written on several crypto-related topics that have been referenced by popular industry players like Tyler Winklevoss, Binance CZ, etc.


Please enter your comment!
Please enter your name here

- Advertisment -

Recent News & Articles

Bill Gates Says He Is Not Invested In Crypto Because It is Valueless to Society 

The former world's richest person does not have any love for crypto. Bill Gates, the co-founder of popular tech company Microsoft disclosed that he does...

Binance CEO Says UST and LUNA Crash Could Have Been Avoided If Terra Used Its Bitcoin Reserve Earlier 

CZ is still not happy with the way Terra handled last week’s situation as he believes the crash could have been avoided if the...

Tether CTO: LUNA And UST Were Flawed In Design But Not A Rug Pull

The team at Terra has been struggling to save LUNA and UST after a sudden crash that sent the price of LUNA spilling down...

Two Major Indicators Suggest Bitcoin (BTC) Possible Price Rebound Above $35,000 

There is a likelihood that Bitcoin's price will rebound soon as it currently sits around major support levels.   Following last week’s market turmoil that...

Majority Of Terra Community Wants New Luna Chain Without UST

The Terra community has been deliberating on the way forward after the crypto lost over 95% of its ATH value. Many in the crypto...

Can Crypto Payments Finally Take Off?

Helio, the Web3 payments company, launched its beta this week to offer a much-needed path for faster adoption of crypto payments. Its complete Web3...

Terra Amends Terra 2.0 Proposal To Accommodate Community Feedback

A few days ago, the Terra team, led by Do Kwon, made a proposal to the community to fork LUNA and create a new...

Subscribe To Our Newsletter

Get Updated with All The latest Crypto News, Articles, Reviews, Analysis and much more. Delivered Every Monday.