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 indicated that Bitcoin and other cryptocurrencies may still have room for appreciation, despite the fears caused by Bitcoin’s sharp decline last month.

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

“The wave of sales last month raised 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 recognize that this November correction was significant.”

“Overall, we find it difficult to see these recent market retracements as emblematic of a 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 with a 9% decline from its January starting price, marking a first annual decrease 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, it was close to US$ 92,000.

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

With more than a 20% contraction in 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 grew for the 17th consecutive month despite volatility.

Optimism about crypto remains firm

The latest 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 halving, but the market for the cryptocurrency has changed drastically in recent years.

Huge drops, however, seem unlikely to happen again, according to senior ETF analysts from a renowned analysis platform, commenting: “Those who invest in Bitcoin through exchange-traded funds (ETFs) are ‘more stable investors,’ which should lead to ‘more stable prices.’”

The same sentiment was reiterated by a British multinational bank 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 is really different,” wrote a digital assets chief. “We believe that crypto winters are a thing of the past.”