JPMorgan analysts have shifted to an optimistic stance on the cryptocurrency market, forecasting a brighter outlook for 2025.
JPMorgan: There are many factors driving BTC growth in 2025
Gold and BTC are the "safe haven" for economic instability
JPMorgan, the financial giant, has traditionally taken a cautious stance on cryptocurrencies, but now has found a "new light" for 2025.
The JPMorgan research team, led by Managing Director Nikolaos Panigirtzoglou, has just released the "Alternative Investment Outlook and Strategy" report. In it, they believe that there will be many factors driving the growth of the digital asset sector in the coming period.
One of those factors is the "debasement trade" trend, where investors turn to alternative assets - such as gold and BTC - to hedge against economic instability. In the context of escalating geopolitical tensions and the upcoming US presidential election, institutional investors, especially hedge funds, may see gold and BTC as assets benefiting from this trend. Meanwhile, Ethereum (ETH) is not expected to have a similar advantage.
Earlier this month, Standard Chartered bank even warned that Middle East tensions could push BTC below $60,000, but would create an attractive buying opportunity for investors.
What does Trump's victory mean?
JPMorgan experts believe that Donald Trump's victory will be beneficial for BTC legally and drive the "debasement trade" through expansionary tax and fiscal policies (debt reduction). However, Trump's chances of re-election are currently assessed as very low when considering assets other than gold and BTC.
Analysts also provide additional reasons for their optimism about digital assets, including recent announcements from traditional asset management organizations like Morgan Stanley, allowing clients to access BTC ETFs. They also note that the liquidations related to the Mt. Gox and Genesis bankruptcies, as well as the German government's sale of BTC, are nearly complete. Furthermore, cash payments from the FTX bankruptcy, expected by the end of this year or early next year, could be reinvested in the crypto market.
The stablecoin market capitalization has nearly reached the peak of $180 billion, equivalent to the period before the Terra/Luna collapse. However, US stablecoin regulations are still pending approval, potentially by 2025. Analysts predict that stablecoins will become more widespread once there is official regulation. Compliant stablecoins will have an advantage, while non-compliant ones may face difficulties. This legal framework could also have a significant impact on Tether, the largest stablecoin issuer in the market.
Although the stablecoin market is still expanding in USD value, this growth mainly reflects market capitalization, not changes in the stablecoin market share compared to the overall market.
BTC is currently trading around $67,000, significantly higher than JPMorgan's estimated BTC mining cost of $47,000. However, when adjusted for volatility to compare with gold, the estimated value is $63,000, with BTC only slightly higher.
4-hour chart of the BTC/USDT pair on the Binance exchange at 10:20 AM on October 16, 2024
Compiled by Coin68
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