Investment Banks Warn Crypto Investors About Bitcoin Halving
Two of the biggest banks in the United States are cautioning crypto investors to approach the upcoming Bitcoin halving with care, as analysts suggest that this cycle may not follow the patterns of previous halvings.
JPMorgan’s Prediction on Bitcoin Price Post Halving
In a recent report, JPMorgan forecasted that the price of Bitcoin is unlikely to surge following the halving event. Instead, the bank believes that the cryptocurrency is more likely to continue its downward trend that started earlier this month.
- JPMorgan maintains a bearish outlook on Bitcoin, despite the increasing optimism surrounding Bitcoin spot ETFs and the halving.
- The bank’s analysts led by Nikolaos Panigirtzoglou expressed their skepticism by stating that the expected price increase post-halving is already factored into the current price.
Could The Halving Be Bearish For Bitcoin?
JPMorgan’s analysis draws parallels between Bitcoin and gold, suggesting that both assets serve as risk-off stores of value and inflation hedges. The bank argued that Bitcoin’s price should theoretically be around $45,000, indicating that the current market price of $63,700 is substantially overvalued.
- The bank highlighted a prevailing long bias in Bitcoin futures open interest and a lack of venture funding in the crypto industry this year to support their stance.
- Alex Kuptsikevich, FxPro’s senior market analyst, echoed concerns about Bitcoin’s technical outlook, noting the absence of a rebound after a recent price drop.
Goldman Sachs’ View on Bitcoin Amid Halving
Contrary to JPMorgan’s bearish forecast, Goldman Sachs acknowledged the historical price surges following past halving cycles but cautioned against relying too heavily on these patterns in the current macroeconomic landscape.
- Bitcoin breached its previous cycle’s all-time high of over $69,000 in March, well ahead of the halving timeline.
- The banking giant emphasized the importance of supply-demand dynamics and the demand for Bitcoin ETFs in shaping the cryptocurrency’s price actions.
The Halving Impact and Beyond
The Bitcoin halving is scheduled to take place later in the week, with expectations high for its impact on the market. However, analysts at Goldman Sachs believe that the immediate price reaction post-halving might not be a significant indicator of Bitcoin’s future performance.
- The bank anticipates that Bitcoin’s price movement will largely hinge on supply-demand dynamics and the demand for Bitcoin ETFs.
- Goldman Sachs highlighted the self-reflexive nature of crypto markets as a key determinant of Bitcoin’s spot price action.
Hot Take: Understanding Bitcoin Halving Implications
As the Bitcoin halving approaches, it’s essential for crypto investors to consider the divergent views of major financial institutions like JPMorgan and Goldman Sachs. While JPMorgan leans towards a bearish outlook for Bitcoin post-halving, Goldman Sachs emphasizes the broader macroeconomic factors at play in shaping the cryptocurrency’s price trajectory.
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