Analysts at U.S. bank JPMorgan Chase (JPM) say the current rebound in cryptocurrency prices is likely to be temporary given the current state of geopolitical uncertainty.
In a note to clients, JPMorgan analysts pour cold water on investor hopes for a long-term bull run in cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).
Many investors are hoping for the best with Bitcoin’s price having risen steadily since the beginning of July and now above $67,000 U.S.
Optimism is also building as new spot Ethereum exchange-traded funds (ETFs) are expected to start trading in the U.S.
However, JPMorgan says the price of Bitcoin remains too high versus its production cost of $43,000 U.S. and its volatility-adjusted comparison to gold, which is $53,000 U.S.
The analysts at JPMorgan also point out that momentum in Bitcoin futures has been weak in recent weeks due to liquidations by creditors of crypto exchanges Gemini and Mt. Gox, as well as heavy Bitcoin selling by the German government.
Bitcoin and other cryptocurrencies are expected to benefit should Donald Trump, who is pro-crypto, win the U.S. presidential election this November.
However, Trump’s win has been thrown into doubt by news that President Joe Biden has abandoned his re-election campaign and endorsed Vice-President Kamala Harris.
Trump is scheduled to speak at the Nashville Bitcoin conference later this week, causing further excitement among crypto investors.
However, JPMorgan notes that there is currently too much uncertainty to expect crypto prices to sustain their current rally heading into the autumn months.
