JPMorgan analysts says that Institutional investors dump Bitcoin for gold

JPMorgan analysts says that Institutional investors dump Bitcoin for gold

JPMorgan Chase analysts suggested that large institutional investors are now dumping Bitcoin (BTC) in favor of gold, Amid Bitcoin touching five-month lows near $30,000.

Reversing a major bullish cryptocurrency market action that drove Bitcoin’s price above $64,000 in mid-April, in its Tuesday note to clients, JPMorgan suggested that institutional investors are going back to gold.

The American megabank said that BTC futures now saw the first biggest decline since the bull market that started in late 2020, citing open interest data in Bitcoin futures contracts on the Chicago Mercantile Exchange.

“The bitcoin flow picture continues to deteriorate and is pointing to continued retrenchment by institutional investors. Over the past month, bitcoin futures markets experienced their steepest and more sustained liquidation since the bitcoin ascent started last October.”

Despite pointing out the latest trend reversal of gold over Bitcoin, JPMorgan still maintains its previous forecast that Bitcoin is on track to hit $140,000 in the long term. “This $140k price should be thought of as a long-term theoretical target assuming a convergence of bitcoin volatility to that of gold and an equalization of bitcoin allocations to that of gold in investor portfolios,” the new investor note reads.

According to JPMorgan, the current fair value for Bitcoin based on a volatility ratio of Bitcoin to gold would be one-quarter of $140,000, or $35,000.

In January, JPMorgan analysts forecast that Bitcoin could potentially evolve into a compelling alternative to gold and hit $146,000 over the long term. “A convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is in our mind a multiyear process,” JPMorgan noted.

 

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