JP Morgan has poured chilly water on hopes of a crypto bull run subsequent yr, with the financial institution’s analysts taking a “cautious” stance of their 2024 crypto outlook.
Analysts led by Nikolaos Panigirtzoglou stated in a newly revealed report that the Bitcoin halving is “largely priced in,” for the reason that halving occasion and its impact on the Bitcoin provide are “predictable and in our opinion are properly factored into the present bitcoin value.”
The workforce argued that based mostly on the present Bitcoin hash charge and mining issue, that the manufacturing price for miners would rise from round $22,000 at current to round $44,000 post-halving.
Bitcoin’s present value of round $42,000 is in step with a 5% drop within the post-halving hash charge, which “appears too low,” with the workforce anticipating a 20% drop within the hash charge and miners with larger overheads exiting the market.
For the reason that 2020 halving introduced Bitcoin’s value to a 1:1 ratio with miners’ manufacturing price, and the present Bitcoin value is round twice the manufacturing price, it implies that the 2024 halving is basically priced in, the report recommended.
Ethereum might “outperform” Bitcoin in 2024, the report stated, pointing to the EIP-4844 “Protodanksharding” improve as a possible catalyst, however raised issues about centralization of staking on the Ethereum community.
The report cautioned that it’s “too early to be getting excited” a couple of revival of DeFi and NFT exercise, whereas pointing to the “encouraging” rise of recent DeFi chains together with Aptos, SUI and Pulsechain, and the “renewed curiosity” in NFTs prompted by the emergence of Bitcoin Ordinals.
A Bitcoin ETF flop?
JP Morgan analysts additionally expressed skepticism that the long-anticipated approval of a spot Bitcoin ETF would convey recent capital to the market.
The report cited each the dearth of curiosity from traders in already-approved spot ETFs in Canada and Europe, and the probability that capital would transfer into spot Bitcoin ETFs from current Bitcoin merchandise, such because the Grayscale Bitcoin Belief (GBTC), Bitcoin futures ETFs and Bitcoin mining firms.
The report argued that as a lot as $2.7 billion might exit GBTC following its conversion to a spot Bitcoin ETF, as traders take revenue. Had been these funds to exit the market moderately than transferring into different Bitcoin devices, it could put “extreme downward stress” on the value of Bitcoin, analysts stated.
JP Morgan and crypto
The JP Morgan report comes only a week after the corporations’ CEO, Jamie Dimon, took intention at crypto in a Senate Banking Committee listening to, saying that he would “shut it down” if he had been the U.S. authorities.
Dimon claimed that, “The true use case for it [crypto] is criminals, drug traffickers, cash laundering, tax avoidance,” including that, “I’ve at all times been against crypto, Bitcoin, etcetera.”
