JPMorgan warns Bitcoin could drop to $1260
Analysts at JPMorgan, a New York-based international investment bank with over $2.6 trillion in total assets under control, have said that the value of cryptoassets is unproven and its underlying blockchain technology will not help improve traditional banking processes for at least the next few years.
Research from JPMorgan’s market analysts noted that digital assets would only have value if investors throughout the world lost confidence in more established forms of investments or assets. The researchers believe cryptoassets would make sense in a “dystopian scenario” where investors have lost faith in the US dollar and gold. But it then countered that argument by saying “Even in extreme scenarios such as a recession or financial crises, there are more liquid and less-complicated instruments for transacting, investing and hedging.”
However, to date Pension funds and asset managers have largely stayed clear of cryptoassets, despite advances in custodial services that would allow safer methods of storing digital money. The report cites worries about volatility, security flaws and propensity for illicit usage as one reason for staying clear.
In addition, the usage of cryptocurrencies for payments – the intended purpose of bitcoin – will remain “challenged,” unable to pinpoint any major retailers that accepted digital coins in 2018.
Therefore, the analysts concluded that if Bitcoin’s bear market persisted it could drop as low as $1,260.
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