Nikolaos Panigirtzoglou, a strategist and digital asset specialist at JP Morgan, released a report saying that bitcoin needs to pull back to $26,000 before starting a new uptick to indicate that the retail market is being suppressed.
He believes bitcoin’s current fair value is between $24,000 and $36,000. The boom-and-bust dynamic of the past few weeks represents a setback for the cryptocurrency market, especially for Bitcoin and ethereum institutional adoption, the report said. Rising volatility, especially relative to gold, is an obstacle to further institutional adoption, as it reduces the attractiveness of digital gold compared to traditional gold in institutional portfolios.
The report writes that bitcoin prices continue to wane and institutional investors are showing signs of weakness in their enthusiasm to buy low, with Chicago Mercantile Exchange data showing little interest in buying low.
Bitcoin funds continue to see outflows, while gold exchange-traded funds continue to see inflows, suggesting that institutional investors are shifting from bitcoin to traditional gold.
In a recent CNBC interview, Jeff Currie, head of global commodities research at Goldman Sachs, warned that cryptocurrencies are risky and that people should not see them as a substitute for gold.
Digital currencies are not a substitute for gold,” he said. If anything, they will replace copper. Bitcoin is a high-risk asset.”
Currie explained that Bitcoin is very volatile and should not be called “digital gold” because it is a very new asset. Gold serves as a safe-haven asset and a hedge against severe inflation.
For years, Goldman Sachs has shown a very controversial view on cryptocurrencies. 2017 saw the institution launch a cryptocurrency trading desk, decide to stop trading and eventually restart it. In 2020 the global investment bank said that digital assets were a bad investment. In addition, some of the firm’s analysts believe that bitcoin and cryptocurrencies are not an asset class.
However, a report last week suggests that the situation may have changed. The report describes the basic characteristics of the major cryptocurrencies and the uses of each.
It gives its opinion on some of the most popular digital assets. According to it, Bitcoin as a large-cap currency, XRP as a real-time settlement system, Ether as a smart contract platform, BNB as a utility token/app, and Polkadot as a blockchain with interoperability.
In addition, Goldman Sachs says the value of Bitcoin is fundamentally in its use and acceptance.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/jpmorgan-bitcoin-to-retreat-to-26000-in-the-short-term-investors-should-not-see-it-as-a-gold-substitute/
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