Last year was characterized by marked negative market sentiment, weighing heavily on the price of Bitcoin and other cryptocurrencies. Now, however, analysts over at JP Morgan are speculating that the price of Bitcoin might fall even further in 2019.
Analysts note that the ”true” value of crypto is not known
This news comes in a recent report from Reuters. It also theorizes that although blockchain technology is expected to reach mainstream financial institutions, banks may not be able to benefit from the advantages of blockchain technology for several years.
Specifically, analysts from the leading global investment banks believe that the ”true” value of cryptocurrencies is still up in the air. This stems from the asset class being – so far – an unproven category which is still relatively new and, therefore, hard to gauge.
Moreover, JP Morgan’s analysts note that cryptocurrencies make the most sense in the form of a potential ”dystopian” market event. This would occur if the global market is shaken by some event or macroeconomic trend which makes investors lose faith in conventional assets and stores of value such as the US dollar or gold.
The report states that ”[e]ven in extreme scenarios such as a recession or financial crises, there are more liquid and less-complicated instruments for transacting, investing and hedging [than that of cryptocurrencies].”
In addition to this, the report also deals with a relative slump in institutional cryptocurrency involvement over the latest six months. The bear market sentiment has, according to JP Morgan, somewhat affected institutions’ urge to enter the market, and individual traders make up the majority of cryptocurrency investors.
Everyday usage of cryptocurrency ”challenged”, price might sink
Moreover, the JP Morgan report goes on to call the usage of cryptocurrency for everyday payments ”challenged.” This is a classification that most would agree with – but also point out that the foundation for potential mainstream payments is now considerably more stable than, say, a year ago.
Furthermore, JP Morgan’s analysts are predicting a further drop in the price of Bitcoin. First and foremost, they predict that it is possible for the price of Bitcoin to drop to levels around $2,400.
However, they also suggest a ”worst case” scenario wherein the bear market would force the price of Bitcoin below $1,260. For reference, the current price of Bitcoin sits at $3,562.
Nevertheless, although the report’s outlook on the price of Bitcoin might be bullish, it does admit that distributed ledger technology could have a dramatic impact on reducing costs for traditional banks, as well as facilitate increased digitalization of processes.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.