JP Morgan: Crypto Market Rally May Be Short-Lived, Positive Catalysts Mostly Digested
The positive catalysts that may have driven up the price of bitcoin and the broader cryptocurrency market have mostly been PRICED IN, including Morgan Stanley Wealth Advisors offering crypto ETFs to its clients, the imminent end of gateway repayments, and both parties in the U.S. pointing to favourable regulation, among other things, J.P. Morgan analysts said in a report. These positive catalysts appear to have been reflected in the current prices of digital assets, the bank said. "Equity markets remain fragile due to limited de-risking of the CME bitcoin futures space ...... Despite the recent correction, we remain cautious on the cryptocurrency market." The bank said any short-term rally in the crypto market is likely to be short-lived, as the price of bitcoin remains too high relative to its cost of production and gold. The bank's analysts currently estimate that the average production cost of bitcoin mining is around $49,000, and any price movement below that level could put pressure on miners, further depressing the BTC price.
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