A new report by financial giant JPMorgan says that the price of bitcoin – which has been on a serious downfall over the past few weeks – could drop a bit further before finally stabilizing.
JPMorgan Offers Fresh Helping of Gloom and Doom for BTC
The currency has been experiencing its worst period since first coming to fruition approximately 12 years ago. The asset ultimately rose to about $64,000 in mid-April, the highest point it had ever reached, though at press time, the world’s number one digital currency by market cap has fallen by close to $30,000 per unit. This is worse than anything experienced by bitcoin in 2014 and 2018, which are two years that traders remember all too well for the asset’s lowly numbers.
One of the reasons JPMorgan seems to think bitcoin could fall further is because institutions have taken a break from buying the asset. So long as the currency continues to travel south, largescale investors are looking to avoid it like the plague. The document says:
There is little doubt that the boom-and-bust dynamics of the past weeks represent a setback to the institutional adoption of crypto markets, particularly bitcoin and Ethereum. We note that the mere rise in volatility, especially relative to gold, is an impediment to further institutional adoption as it reduces the attractiveness of digital gold vs. traditional gold in institutional portfolios.
Per the report, JPMorgan states that volatility is likely to continue throughout 2021 and things could only marginally improve before the year is out. The document reads:
It now seems unlikely that we see this volatility ratio returning to the x2 levels of last summer. The best we can hope for over the medium term is for this volatility ratio to partially revert from around x6 currently to around x4 by year end.
For some traders, the bitcoin price drop is a good thing and represents a stronger buying option. One such person suggesting this is Robert Kiyosaki, the author of the bestselling book “Rich Dad, Poor Dad.” Recently, the money mogul took to Twitter to explain that the currency could wind up falling into the high $20,000 range, and that he would not hesitate to purchase more of the asset if it did.
Bitcoin is collapsing. This is great news. When the price hits $27,000, I can start shopping again. Much will depend on the global macro environment. Remember that the problem is not gold, silver, or bitcoin. The problem is the incompetence in government, the Fed, and Wall Street. Remember that gold cost $300 in the year 2000.
Don’t Spend What You Can’t Afford to Lose
Still, others are warning traders to play it safe for the time being. Nate Nieri – a CFP with Modern Money Management in San Diego, CA – said the following of bitcoin:
You have a high chance of losing it all, but a small chance of winning it big.