Bitcoin (BTC) witnessed the worst May in the last 10-years. JPMorgan’s analyst and crypto expert Nikolaos Panigirtzoglou has said in his notest research note to clients that the price of Bitcoin will continue to fall in the short term. He reasoned that the price will keep falling because of the weakened demand from institutional investors.
The JPMorgan analyst forecasted on the basis of BTC’s volatility ratios to gold that in the mid-term, the price of Bitcoin against the US Dollar (BTC/USD) will continue trading between US$24,000 and US$36,000.
The research note of crypto expert Nikolaos Panigirtzoglou said:
“The fair value for bitcoin based on a volatility ratio of Bitcoin to the gold of around x4 would be 1/4th of $145k or $36k. The fair value for Bitcoin based on the current volatility ratio of Bitcoin to the gold of around x6 would be 1/6th of $145k or $24k. We thus see a fair value range of $24k to $36k over the medium term.”
However, he also noted that Bitcoin price’s long-term “theoretical target” remains US$145,000. However, he also added that this long-term target will be reached “assuming a convergence of Bitcoin volatility to that of gold and an equalization of bitcoin allocations to that of gold in investor portfolios.”
After the May 19 crash in Bitcoin price, Panigirtzoglou says that the institutional investors seem to be reluctant to purchase at every dip in BTC price. He said:
“We note that the mere rise in volatility, especially relative to gold, is an impediment to further institutional adoption as it reduces the attractiveness of digital gold vs. traditional gold in institutional portfolios.”
However, this statement of JPMorgan’s strategist is significantly different from what the investment firm previously suggested. JPMorgan previously suggested that large institutional investors were dumping Bitcoin in favor of gold as BTC/USD pair fell to near US$30,000, a 5-month low level.
At press time, the price of Bitcoin was hovering around US$35,867.39, which is around -2.68% in the red over the last 24-hours. In the last 30-days, the BTC/USD pair is down by over -36%. However, the Bitcoin price is still 286% in the green over the last 1-year.
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