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Summary
- Strategists at JPMorgan Chase have cautioned that if Bitcoin’s value does not breach the US$ 60,000-mark soon, it can lose its momentum.
- Bitcoin hit a record high value of US$ 64,000 earlier in April amid a massive crypto rally fueled by the Coinbase direct public offering (DPO).
- Bitcoin has since dipped to nearly US$ 55,000.
No other investment instrument is probably as volatile as cryptocurrencies. Detractors warn that they hold no intrinsic value, have no legal backing and are fueled by speculative trading.
Despite this critical take, however, Bitcoin’s presence in the portfolios of global investment giants and tech titans like Elon Musk indicates that cryptocurrencies deserve some attention.
The most popular digital currency at the moment, Bitcoin hit a record high value of US$ 64,000 earlier in April amid a massive crypto rally fueled by the Coinbase direct public offering (DPO).
It has since dwindled and American financial services enterprise JPMorgan Chase has warned that the cryptocurrency is in for trouble if it doesn’t quickly rebound.
©Kalkine Group 2021
What Does JPMorgan Say About Bitcoin?
Strategists at JPMorgan Chase have cautioned cryptocurrency enthusiasts that if Bitcoin’s value does not breach the US$ 60,000-mark soon, it can lose its momentum.
In its analysis, the investment banking enterprise cited the last three times Bitcoin’s value dropped – once in November 2020, in January 2021 and February 2021. Although the cryptocurrency quickly recovered in each of these occasions and went on to see record surges, Bitcoin’s latest dip in value can be something it has never seen before.
Joining the chorus, Tallbacken Capital Advisors CEO Michael Ewing Purves wrote in a note on Wednesday that it may not be a good idea to further bet on the upsurge in Bitcoin value.
How Bitcoin Fell From the Coinbase DPO-Fueled Rally
Coinbase, a cryptocurrency exchange platform, debuted on the Nasdaq exchange in April, witnessing its valuation hit US$ 100 billion. Investors’ surging interest in the Coinbase DPO fueled Bitcoin’s rally to hit the record high of US$ 64,870.
The momentum, however, did not last long, and Bitcoin has since dipped to nearly US$ 55,000.
Two visible causes that could have contributed to the dip are US Treasury’s likely crackdown on digital assets and the reports of Central Bank of the Republic of Turkey’s (CBRT) upcoming ban on digital currencies.
Bitcoin Criticism Is Not New
This is not the first time that Bitcoin has faced criticism. In 2017, JPMorgan Chase CEO Jamie Dimon made headlines when he called cryptocurrencies ‘a fraud’.
The latest fall in Bitcoin’s value can also be seen by some investors as an opportunity for profit booking. As for Bitcoin’s performance, it will be interesting to find out where it goes from here.
