Analytics / Forex and Crypto News
Analysts from investment bank JPMorgan continue to characterize Bitcoin as a "risky" rather than a "safe" asset, citing its volatility.
In their letter to customers, which the bank sent out on January 22, the bank's analysts draw attention to the growing correlation between Bitcoin and the S&P 500. The level of correlation has been growing since March 2020.
Besides Bitcoin, the S&P 500 also correlates with gold. Its correlation was predominantly positive. Hence, JPMorgan analysts conclude that "Bitcoin and gold could be characterized as 'risky' rather than 'safe' assets." Investors, according to JPMorgan, view these assets as “alternative” rather than safe or hedging options.
Despite the fact that more and more institutional investors are entering the cryptocurrency market, and Bitcoin is gaining more recognition, it will be difficult for it to return to levels near $40000. At JPMorgan analysts attribute the recent achievement of the price of Bitcoin to a new all-time high with an influx of funds into the Bitcoin trust Grayscale ( GBTC). The inflow of funds into the Grayscale Bitcoin trust has passed its peak, which means that the price no longer has such a strong momentum to rise again to the $40000 mark. Grayscale CEO Michael Sonnenschein said that the Bitcoin trust has received $1,2 billion in investor funds since January 15.
After Bitcoin hit a new all-time high, some analysts predicted that Bitcoin's price would hit $146000 in the long term. However, JPMorgan analysts point out that it will take at least several years to achieve this goal. “The short-term balance of risks is shifted downward,” the strategists concluded.