Several JP Morgan analysts have predicted that Bitcoin may perhaps drop below $1,260, while banks will not gain from blockchain for at least three to five years, as per the report of Reuters on Jan. 24.
As per Reuters, analysts from the chief international investment bank think that the true value of cryptocurrencies is still unproven. The report further added that they only make sense in a hypothetical “dystopian” event, wherein investors have lost confidence in main traditional assets like the U.S. dollar and gold.
The analysts stated in a report that even in extreme scenarios like the recession or financial crises, there are less-complicated and more liquid instruments for investing, transacting, and hedging as compared to cryptocurrencies and digital assets.
JP Morgan also mentioned that institutional involvement in the cryptocurrency and digital assets domain has dropped over the past six months. As per them, individual traders are making up the majority of the market. In its report, the company also claimed that using cryptocurrency for payments will remain challenged. The report further added that the firm was unable to find any major retailers that accepted cryptocurrency in 2018.
The investment bank’s analysts have further suggested that Bitcoin is expected to fall to around $2,400. As per them, it could even fall below $1,260 if the current bear market persists. At the time of reporting, the biggest cryptocurrency by market cap is trading at around $3,588, down around 1.8 % over the past week, as per data from CoinMarketCap.
While the investment bank predicted that the widely-hyped blockchain technology will not make any substantial difference for banks at least three to five years, JP Morgan still concluded that distributed ledger technology has potential to cut costs for global banks and digitize a variety of complex processes.
It is to be noted that Jamie Dimon is vocally critical of cryptocurrencies and digital assets, including Bitcoin, which he called a scam in September 2017. Nonetheless, he admits the potential of the blockchain, mentioning that Blockchain is real, it’s technology, but Bitcoin is not the same as a fiat currency.