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Bitcoin Troubles Far From Over As More Carnage Looms, JPMorgan Analysts

Despite optimism about Bitcoin’s future trajectory heading into the Bitcoin Halving, analysts at JPMorgan have raised concerns that things may not go according to everyone’s expectations. They believe that a storm still lies ahead for the flagship crypto token before any massive move to the upside. 

Further Bitcoin Pullbacks Are To Be Expected

According to a Bloomberg report, JPMorgan strategists have warned that Bitcoin could still experience further pullbacks following its recent decline. They alluded to the recent net outflows recorded by the Spot Bitcoin ETFs, which underscored the current bearish sentiment in the Bitcoin ecosystem. 

These strategists, led by Nikolaos Nikolaos Panigirtzoglou, also highlighted the sustained open interest in CME Bitcoin futures as another bearish signal for Bitcoin’s price. They further argue that Bitcoin “still looks overbought” and expect further price dips leading up to the Halving event in mid-April. 

Meanwhile, these JPMorgan analysts emphasized the decline in net inflows into Spot ETFs, noting that this proves that a sustained one-way net inflow is not possible. Therefore, they expect investors in these funds to keep taking profits heading into the Bitcoin Halving. This wave of profit-taking is also more likely, considering that Bitcoin “still looks overbought despite the past week’s correction.” they claimed. 

This recent research note by JPMorgan further reaffirms their bearish sentiment towards Bitcoin’s price despite the flagship crypto exceeding expectations. Last month, the bank predicted that Bitcoin could drop to as low as $42,000 after April as “Bitcoin-halving-induced euphoria subsides.”

Naeem Aslam, chief investment officer at Zaye Capital Markets, also echoed JPMoragn’s sentiments when he suggested that Bitcoin’s recent rally didn’t show enough strength. Aslam believes Bitcoin could fall below $50,000 if the Halving event “fails to really keep the momentum going.”

What Could Happen After The Halving Event

Crypto trader and analyst Rekt Capital recently provided insights into what could happen after the Havling event while elaborating on the four phases of Bitcoin Halving. According to him, there is usually a re-accumulation period after the Halving, which could last for up to five months. 

During this period, he noted that many investors get “shaken out in this stage due to boredom, impatience, and disappointment with lack of major results in their BTC investment in the immediate aftermath of the Halving.” Rekt Capital added that this time could be different since it is the first time this re-accumulation could develop around the new all-time high (ATH) area. 

Therefore, he believes this “Re-Accumulation Range may simply take the shape of a regular sideways range and may not last very long before additional uptrend continuation.”

Bitcoin price chart from Tradingview.com

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JPMorgan Analysts Predict Bitcoin Crash To $42,000 Post-Halving – What You Need To Know

Bitcoin, the world’s largest cryptocurrency, faces a potential downturn in its price following the anticipated halving event scheduled for April, according to analysts at JPMorgan led by Nikolaos Panigirtzoglou.

This event occurs approximately every four years and is expected to slash miner rewards from 6.25 BTC per block to 3.125 BTC. As a result, JPMorgan analysts have warned that the Bitcoin price could drop toward $42,000 post-halving.

Reason Behind The Potential Crash To $42,000

The analysts attribute this potential decline to the reduced profitability for miners and the subsequent increase in BTC production costs. The analysts disclosed that the Bitcoin production cost has historically served as a “lower bound” for its prices, with the estimated range doubling post-halving to around $53,000.

Nonetheless, a potential 20% reduction in the BTC network’s hashrate looms is primarily attributed to the departure of less efficient mining rigs from the operational landscape.

Consequently, this scenario may drive the estimated production cost range to $42,000, calculated under an average electricity cost of $0.05 per kilowatt-hour (kWh).

According to the analyst, Bitcoin miners with “below-average electricity costs” and “more efficient equipment” are expected to fare better following the halving event. In contrast, those with “higher production costs” may struggle to remain profitable.

Consequently, analysts anticipate an increased concentration within the Bitcoin mining industry, with publicly listed miners likely to hold a higher share.

Moreover, there is the prospect of “horizontal integration” via “mergers and acquisitions” among miners spanning different regions, aiming to leverage “synergies and minimize” collective operational expenses.

Bitcoin Market Sentiments And Potential Surge

Meanwhile, as JPMorgan analysts suggest a potential drop in Bitcoin’s price post-halving, Hunter Horsley, CEO of Bitwise, remains optimistic about Bitcoin’s long-term outlook. Horsley predicts that the cryptocurrency will surge to $250,000 sooner than anticipated.

Meanwhile, many metrics within the BTC market signal a potential surge for Bitcoin. On-chain data reveals that the Bitcoin MVRV ratio has reached levels reminiscent of the parabolic bull run experienced in 2020, suggesting a forthcoming surge may be imminent.

Amid these varying forecasts and market sentiments, BTC trades at $63,391, marking a slight retracement from its recent peak above $64,000 – the highest level traded in the past two years.

Featured image from Unsplash, Chart from TradingView

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Banking On Ethereum: JPMorgan Says Ether Will Rise Above Bitcoin In 2024

JPMorgan analysts, while maintaining an overall cautious stance on the cryptocurrency market, foresee Ethereum (ETH) surpassing Bitcoin (BTC) and other digital currencies in market price performance by 2024.

This bullish outlook for Ethereum reflects a distinctive perspective within the institution, suggesting that the analysts see unique potential and favorable prospects for Ethereum relative to other digital assets, even amid an overall cautious sentiment towards the broader crypto landscape.

In a published note on Wednesday, a team of analysts headed by Nikolaos Panigirtzoglou conveyed their expectation that Ethereum (ETH) will reclaim its prominence and regain market share within the cryptocurrency ecosystem in the upcoming year.

Ethereum Will Overtake Bitcoin – JPMorgan

“We believe that next year Ethereum will re-assert itself and recapture market share within the crypto ecosystem,” Panigirtzoglou wrote in a note.

The analysts underscored the pivotal role of the EIP-4844 upgrade, popularly known as Protodanksharding, as the primary catalyst for Ethereum’s anticipated resurgence.

This crucial upgrade, scheduled for implementation in the first half of 2024, is poised to bring about substantial improvements in Ethereum’s network activity.

Danksharding is a more efficient sharding method for Ethereum, and protodanksharding is the first step toward its complete implementation. Danksharding sidesteps the tedious procedure of dividing Ethereum into several shard chains, as contrast to the initially intended sharding method.

Data blobs, which are connected to blocks and can hold more data than blocks but are not permanently stored or accessible by the Ethereum virtual engine, are instead introduced.

Meanwhile, JPMorgan’s optimistic forecast aligns with Standard Chartered’s, as they previously stated in a communication that Ether might experience a 400% surge within a few years, followed by a more sustained upward movement towards $35,000.

Geoff Kendrick, the Head of FX Research, West, and Digital Assets Research, expressed the viewpoint that the upward trajectory for Ether might unfold at a more gradual pace compared to Bitcoin.

Ethereum Price Prediction: 5x Increase

Despite this potentially more extended timeframe, Kendrick envisions Ethereum eventually attaining a higher price multiple than Bitcoin relative to their current levels. Specifically, he anticipates Ethereum reaching a price multiple of 5.0x, surpassing Bitcoin’s expected 3.5x multiple.

Layer 2 networks, such as Optimism (OP) and Arbitrum (ARB), would gain the most from the upgrade, according to the JPMorgan analysts.

Layer 2 networks on Ethereum would benefit from the increased temporary data space, which would increase network throughput and decrease transaction fees. Data blobs improve Layer 2 network efficiency without changing the size of an Ethereum block.

In the meantime, as ether discovers new applications, demand for it will rise, and cryptocurrency-related trends will only grow. For example, the most common Ethereum use case is NFT transactions, which Kendrick believes will grow.

At the time of writing, Ether was trading at $2,281, up 5.0% in the last 24 hours, while Bitcoin was exhanging hands at $42,910, with a 2.3% increase in the last 24 hours.

Featured image from Pixabay

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Binance CEO Disputes JPMorgan Chief’s Critique Of Crypto

Richard Teng, the Chief Executive Officer (CEO) of the world’s largest crypto exchange Binance challenged JPMorgan Chase’s CEO Jamie Dimon’s stance on cryptocurrencies.

Binance CEO Disagrees With Jamie Dimon

The Binance CEO recently defended cryptocurrencies by opposing the anti-crypto narrative promoted by the JPMorgan CEO in a hearing held on Wednesday. Teng took to X (formerly Twitter) to share his displeasure with Dimon’s narrative against crypto.

The JPMorgan CEO’s critics were set on the legitimacy and regulation of cryptocurrencies. According to Dimon, he has “never supported cryptocurrencies” and believes the “only real use case for crypto is criminals.”  He further added that he would close down crypto if he had the power to do so. The CEO stated:

I’ve always been deeply opposed to crypto, the only true use case for it is criminals. If I were the government I’d close it down. 

Teng underscored the need to compare the scope of illegal activity in cryptocurrency to that of traditional fiat money. He further highlighted the data compiled by Dr. Andrzei Gwizdalki from sources like the UN and the World Economic Forum.

The data shows that illegal activities connected to fiat currencies are over 100 times bigger than crypto. According to the data, cryptocurrencies are linked to an estimated $20 billion in illegal activities. 

Meanwhile, fiat currencies such as the United States dollar are implicated in approximately $3.2 trillion in illegal activities yearly. However, due to the secret nature of money laundering, it is difficult to determine the total amount that has been lost. 

So far, Dr. Andrzei Gwizdalki believes the corruption and money laundering in connection with fiat “casts a dark shadow.” He also added that this is a reputation that the crypto space should not mirror.

Furthermore, Gwizdalki has urged policymakers to be well-informed and handle real issues within their traditional systems. He believes using crypto for illegal reasons is “stupid and dangerous” since every transaction is transparently recorded.

The Crypto Firm Faces Potential Collapse

Former United States Securities and Exchange Commission (SEC) official John Reed Stark has highlighted a potential collapse for Binance. Stark’s belief is due to the Binance plea agreement by the former CEO of the crypto exchange Changpeng CZ Zhao. Stark stated:

The Binance Plea Agreement is Already Blowing Up. More Evidence of the Possibility of a Binance Collapse (And a 10-Year Sentence for CZ).

He also highlighted Teng’s failure to provide answers to simple questions during an interview as another potential reason. In the interview, journalist Scott Chipolina asked Teng where Binance is headquartered, but the CEO refused to provide specific answers.

So far, Stark has voiced doubts about the exchange’s capacity to comply with the stringent DOJ/FinCEN monitoring and cooperation requirements. He believes that while investigations are still ongoing, the government will bring more accusations against Binance and Changpeng Zhao.

Binance

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Did JPMorgan Secretly Buy 7.5 Million XRP? Here’s What We Know

The crypto rumor mills have been abuzz lately with talk of JPMorgan, a US megabank, secretly buying XRP tokens. This rumor has gained ground and in the course of its spread, has garnered the attention of the crypto community as they dissect it.

JPMorgan Reportedly Buys 7.5 Million XRP

The first reports of this rumor emerged after a news report citing a leaked report, claimed that the investment giant had actually bought 7.5 million XRP tokens. This rumor quickly made its way to social media where users on platforms such as X (formerly Twitter) have spread it widely.

One of the most prominent reposts of the article includes that of Amelie, a German influencer with over 27,000 followers on X. As the rumors gain more popularity, it has also come under scrutiny due to its lack of evidence and the fact that the numbers do not add up.

For example, one X user points out that the article says that the 7.5 million XRP reportedly bought by JPMorgan makes up 7.5% of its portfolio. However, this would mean that JPMorgan’s total portfolio would have to be worth $6.2 billion as opposed to its actual $440 billion value.

There have also not been any official statements from JPMorgan about buying XRP or actually holding any cryptocurrency in their portfolio. Interestingly, JPMorgan actually launched its own JPM Coin which will reportedly be used to carry out $10 billion in daily transactions.

XRP price chart from Tradingview.com (BlackRock JPMorgan)

Adding BlackRock To The Debate

The rumors have also included BlackRock showing an interest in XRP but so far, there has been no indication that this is the case. The only time that BlackRock has been heavily mentioned around XRP communities is when a fake filing of a BlackRock XRP ETF showed up on the Delaware Corporation website.

This fake filing has since been taken down and the Delaware authorities have reportedly begun their investigations to figure out the party or parties that were behind the fake filing.

XRP influencer CryptoInsightUK also took to X (formerly Twitter) to debunk the rumors of BlackRock buying the token. He referred to it as a “stupid rumor” and that it is untrue, advising investors to not be distracted by the “noise.”

Although JPMorgan and BlackRock are not going in on XRP, banks all around the world are reportedly trying to tap into the potential. A new report from the Basel Committee on Banking Supervision (BCBS) revealed that the token currently ranks third in the list of digital assets held by global banks. XRP reportedly makes up 2% of the 9.4 billion euros that these banks have invested in digital assets, meaning they hold around 188 million euros worth of XRP.

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JPM Coin Poised For $10 Billion Daily Transaction Boom, JPMorgan Reports

JPMorgan Chase & Co. anticipates that its digital currency, JPM Coin, will facilitate daily transactions amounting to $10 billion in the coming year.

Umar Farooq, the Global Head of Financial Institution Payments at the bank, revealed this projection during an interview with Bloomberg held at the Singapore FinTech Festival.

Farooq’s insights shed light on the ambitious expectations the financial institution has for the widespread adoption and utilization of JPM Coin as a means of conducting transactions in the digital financial landscape.

Takis Georgakopoulos, the Global Head of Payments at JPMorgan Chase & Co., recently disclosed that JPM Coin is actively managing a staggering $1 billion in daily transactions.

In a recent interview on Bloomberg Television, Georgakopoulos highlighted the predominant use of JPM Coin in daily transactions denominated in US dollars and underscored the bank’s dedicated efforts to broaden its utilization, signaling a robust commitment to the ongoing evolution of digital financial instruments.

JPM Coin: Ambitious Growth Goals

Farooq expressed his aspiration for a substantial increase in transaction volume, aiming for a growth rate ranging from five to 10 times over the specified period.

“We really think it’s going to start taking off,” he said during an interview with Haslinda Amin of Bloomberg TV Wednesday, on the sidelines of the Singapore FinTech Festival.

Although the billion-dollar daily transaction volume achieved by JPM Coin is notable, it represents only a small fraction of the colossal $10 trillion in daily US dollar transactions managed by JPMorgan.

JPM Coin presents a secure and efficient avenue for wholesale clients to participate in dollar and euro-denominated payments within the confines of a private blockchain network.

Testing The Waters: Evaluating Digital Ledgers On A Grand Scale

Advocates for blockchain technology contend that it has the potential to facilitate instant payments at a reduced cost compared to prevailing technologies.

However, it’s crucial to note that digital ledgers, despite their touted advantages, have not undergone trials on the same expansive scale as established payment networks.

The claims surrounding the efficiency and cost-effectiveness of blockchains are still in the process of being substantiated through broader and more comprehensive real-world applications.

Programmable Payments For Institutional Clients

Meanwhile, JPMorgan has just implemented a programmable payment functionality specifically designed for institutional customers of their private blockchain network.

The programmable payments functionality has been made available to all institutional clients, enabling the execution of real-time, programmable treasury operations and the development of novel digital business models.

The first institutional client to utilize the programmable payments capability is Siemens AG, a German tech company that demonstrated its use as recently as November 6. Before the conclusion of 2023, FedEx and Cargill are anticipated to utilize the solution as well.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from AdWeek