In a new report, U.S. bank JPMorgan Chase (JPM) says that Bitcoin (BTC) and other cryptocurrencies are suffering from weak demand and a lack of positive catalysts.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
The result has led prices for the largest and most popular cryptocurrencies such as Bitcoin and Ethereum (ETH) to slump in recent weeks, says the bank. “This is a negative development and indicative of demand weakness,” writes JPMorgan analyst Nikolaos Panigirtzoglou in a note to clients.
The current weakness in the crypto market is likely due to several factors, says the analyst, including institutional investors taking profits after a big run in Bitcoin last autumn. Additionally, supportive crypto policies from U.S. President Donald Trump aren’t likely to kick-in until the second half of this year, leaving crypto without any near-term catalysts.
Slumping Demand
Lower demand from momentum-driven funds is also likely impacting demand for crypto currently, says JPMorgan. The price of BTC, the largest crypto by market capitalization, is presently at $98,320, down from a record high of $109,300 reached on Jan. 20 of this year, the date of Trump’s inauguration.
Despite the current slump, there was some positive news for the crypto sector with exchange Coinbase Global (COIN) announcing that the U.S. Securities and Exchange Commission (SEC) has dropped its enforcement case against the company. Analysts say dismissal of the Coinbase case will have long-term positive ramifications for other crypto enforcement cases and the industry as a whole.
Is BTC a Buy?
Most Wall Street firms don’t offer ratings or price targets on Bitcoin, so we’ll look at the cryptocurrency’s three-month performance instead. As one can see in the chart below, the price of BTC has declined 0.79% in the last 12 weeks.
