JPMorgan Strategists View Bitcoin As More Of A ‘Risk’ Asset

By Corey Hansford 2 Min Read

JPMorgan strategists consider Bitcoin as more of a “risk” asset rather than a “safe” asset.

Due to how Bitcoin has performed against equity over the past year. JPMorgan strategists led by Nikolaos Panigirtzoglou made the statement in a note published on Friday.

The strategists noted that the correlation between Bitcoin and the S&P 500 has increased. While the correlation between Gold and the S&P 500 has also been mostly positive. As such, they believe both Bitcoin and Gold could be better characterized as a risk rather than safe assets.

They also noted that they believe investors prefer Gold and Bitcoin. Precisely because they are those alternative options as opposed to safe assets.

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The JPMorgan strategists reiterated in the note. Believing that BTC’s price could reach $146,000 in the long-term provided that its volatility is able to meet that of gold. They also added that it is likely a multi-year process. Dependent on ownership becoming more institutional and less retail.

In the short-term, however, BTC’s price returning to $40,000 is unlikely according to the strategists. “At the moment, the institutional flow impulse behind the Grayscale Bitcoin Trust is not strong enough for BTC to break out above $40k. As the 4-week pace of the flow into GBTC appears to have peaked,” they noted.

“While bitcoin is currently trading within our fair value range of between $11k and $35k (at current levels of bitcoin volatility). The apparent peaking of the flow pace into the Grayscale Bitcoin Trust and a mechanically decay of our momentum signal till the end of March, both imply that the near term balance of risks is still skewed to the downside.”

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