Shock JPMorgan Price Prediction Reveals ‘Catastrophic’ Doomsday Scenario May Be Just The Start For Bitcoin And Ethereum
Bitcoin
bitcoin
, ethereum
ethereum
, and other cryptocurrencies have been thrust back into the limelight this year and are now at a “pivotal moment.”
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The bitcoin price added around 70% over the first three months of the year, making it among the best-performing assets even as U.S. senator Elizabeth Warren begins building an “anti-crypto army.”
Now, as the U.S. banking crisis begins to recede, JPMorgan analysts have said the bank chaos vindicated many bitcoin, ethereum and crypto believers—and issued a bullish bitcoin price prediction.
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JPMorgan chief executive Jamie Dimon has long been an outspoken critic of bitcoin, ethereum and … [+] other cryptocurrencies amid wild bitcoin price swings.
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“For crypto supporters, the U.S. banking crisis exposed the weaknesses of the traditional financial system given banks’ maturity mismatch is susceptible to bank runs,” JPMorgan strategists led by Nikolaos Panigirtzoglou, wrote in a note seen by Barron’s.
“Crypto supporters have been arguing for a long time that the crypto ecosystem is superior, not least because deposits are held in entities such as stablecoins which as a digital form of money market funds are 100% backed with high-quality liquid assets and are thus less susceptible to runs.”
The JPMorgan analysts’ bitcoin bullishness is at odds with the bank’s chief executive Jamie Dimon, who called crypto a “decentralized Ponzi scheme” in September—though the bank is making crypto moves of its own.
Bitcoin is now just over a year away from its next supply cut, known as a halving, which will increase bitcoin’s cost of production and potentially boost its price. The next bitcoin halving, its fourth, is currently scheduled for late April 2024 and will see the bitcoin block reward issued to miners who maintain the network drop from 6.25 bitcoin to 3.125 bitcoin.
“This would mechanically double bitcoin’s production cost to around $40,000, creating a positive psychological effect,” Panigirtzoglou said. “This is because bitcoin’s production cost has historically acted as an effective lower bound.”
Panigirtzoglou also predicts that the sudden growth of bitcoin-based non-fungible tokens (NFTs) called ordinals this year could provide another price support as they boost bitcoin miner revenue.
“This is because metadata such as text, images can be inscribed on the bitcoin network itself, without relying on smart contracts as seen with other blockchains, where NFTs are created through smart contracts,” Panigirtzoglou said.
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The bitcoin price has swung wildly over the last few years, dragging the ethereum price and other … [+] cryptocurrencies with it.
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The surging popularity of bitcoin ordinals has improved sentiment for the wider NFT and crypto market.
“The recent movement in bitcoin is also positive for the NFT market, as all boats rise with the tide,” John Stefanidis, the chief executive of NFT-based gaming platform Balthazar, said alongside an NFT market report. “It’s likely to have a positive impact on the overall sentiment of the market. Bitcoin is currently trading at above US$28,000, which we haven’t seen since June last year.”
