Photo = REUTERS
With the bitcoin price surpassing $50,000 for the first time ever, investment bank JP Morgan issued a warning that the rise in bitcoin price will not last long.
Bitcoin price hit a record high of 5,2079.2 dollars, up 5.92% from the previous day on the 17th (local time). The reason for the rise in the price of bitcoin is because major corporations and financial companies such as Tesla have bought it and adopted it as a payment method, increasing the demand for bitcoin. JPMorgan predicts that the number of these companies will not increase any more.
According to JPMorgan, the market capitalization of Bitcoin has increased by $700 billion compared to the end of September last year. On the other hand, the inflow of institutional funds during the same period was only $11 billion. JP Morgan analyzed that this gap is the result of a combination of inelastic bitcoin supply and demand from retail customers and speculative traders.
JP Morgan analyzed, “If the uptrend in October-December continued as real investment funds flowed into Bitcoin, the surge from January seems to have been more influenced by speculative funds.” He added, “Unless the inflow of retail funds is accelerating again, it means that more funds inflow are needed to maintain the current bitcoin price.”
He pointed out that Bitcoin’s volatility could also hold back Bitcoin’s hitting record highs. Cryptocurrency is often referred to as’digital gold’. This means that looking at the market cap size of the traditional metals market can explain the potential market value of Bitcoin.
JP Morgan suggested that the bitcoin price could fall, saying that when the price was corrected to reflect volatility, the bitcoin price may have already exceeded the gold price. JPMorgan said, “At the current market price, bitcoin has already more than doubled compared to gold in terms of risky assets,” said JPMorgan. “
Reporter Jaeyeon Ko [email protected]
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