We see that the Bitcoin price has been consolidating for some time. With that, optimistic investors hope we are slowly moving toward another bull run. JP Morgan analysts are warning against optimism. They share figures that suggest otherwise. Moreover, those figures seem to be confirmed by other data. We analyze the situation.
JP Morgan foresees prolonged bear for Bitcoin and crypto
In their analysis of the crypto market, analysts first looked at crypto price trends. They note that an index of the largest crypto already suffered a 56% loss this year and that interest in Bitcoin (BTC) is waning as the price has long been in a consolidating phase around $20,000.
The question now is whether this is a normal market development that fits into the Bitcoin halving cycles theory or whether we are looking at a more serious phenomenon here. JP Morgan assumes the latter.
Venture Capitalists are investing less in crypto
They base this on the investments that large lenders (called venture capitalists) are making in crypto. They analyzed the numbers and see that large investors are investing less and less in crypto. They expect these large parties to put $10 billion into crypto innovation this year. This is obviously a huge amount of money, but is less than a third of what those same investors invested last year.
Moreover, the data JP Morgan shared with Bloomberg show that the dip in investments also continued in the months of September and October. With that, they say, there is no seasonal influence, but a stronger trend.
Of course, you can follow all live BTC and crypto prices yourself 24 hours a day via the site of Tradeincrypto.com.
Coinbase also assumes Bitcoin and crypto bear
JP Morgan is not alone in its concerns about a structural bear trend for Bitcoin and crypto. The CFO of major crypto exchange Coinbase, Alesia Haas, also said in an interview that continued and perhaps strengthening headwinds are to be expected for crypto.
The numbers reflect this. As a publicly traded company, Coinbase must publish its quarterly figures. The third quarter figures were a good fit for Halloween, as this was scare tactics.
For example, the number of users dropped from 9 million in the previous quarter to 8.5 million in this quarter. As a result, the financial result dropped to a loss of $545 million, while over the same period last year they were able to record a profit of $400 million. Of course, this is reflected in the share price. It lost more than 75% of its value in a year, which is higher than the 56% loss that Bitcoin records over a year.
In short, caution is advised.
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Note: We never give financial advice, so you can’t interpret our contributions that way either. Always do your own research and decide rationally if, when, what and how much you want to invest.