Cryptocurrency markets have been going through a tough time for the past one year now. Bitcoin’s price, which was once expected to cross $20,000 is now struggling to stay stable even at the $3000-s. Analysts from JP Morgan aren’t really optimistic about the future of cryptocurrencies, predicting that the price of Bitcoin might crash to less than half of what it currently stands at - hitting a rock bottom at $1,260.
This information comes via a Reuters report where the JP Morgan analysts have said that if the cryptocurrency markets continue to be in this bear phase, the price might fall to extreme lows. However, while they predict the $1,260 to be the bottom of the barrel, the same analysts have also stated that there is a price support at about the $2,400 price point. Here’s an extract from the Reuters report:
“The usage of cryptocurrencies for payments - the intended purpose of bitcoin - will remain “challenged,” JP Morgan said, adding that it was unable to pinpoint any major retailers that accepted digital coins in 2018.
Marketplaces where small businesses and individuals have control over payment methods would prove most fertile ground for the spread of cryptocurrencies, it said, citing a Reuters analysis of the usage of bitcoin in commerce.
Bitcoin, which stood at around $3,565 in afternoon trade, is likely to have cost support at around $2,400, and could fall below $1,260 if a bear market persists, JPMorgan said.”
Analysts from the bank stated that the true value of cryptocurrencies continues to remain ‘unproven’ and the only scenario in which cryptocurrencies make sense is an unlikely, dystopian, event where investors lose faith in the banking system and on traditional assets such as the US Dollar and gold. The report further added that even in an adverse economic scenario such as recession or other forms of financial turbulence, traditional assets are more liquid and simpler as opposed to cryptocurrencies when it comes to transactions, investments and hedging.
At the time of this writing, the price of one Bitcoin is $3,588 - down by almost 2% as compared to the past week. Bitcoin prices have been on a strong downtrend for the past year - with short exceptions every now and then. Earlier this month, there was a short increase in the price of Bitcoins, which briefly managed to stay beyond the $4,000 mark before eventually collapsing.
January 2019 marks the 10th anniversary of Bitcoins - however, it is also one of the most challenging points in time for the currency, which faces not only a loss of faith, but also other issues such as slow adoptions, internal rebellions, constant threat from hackers, etc. As the leader of the entire crypto-economy, it will be a Bitcoin price rally which will lead the market recovery. However, the JP Morgan reports don’t really seem reassuring.
Stay tuned with us at Cryptoground for more updates and news stories from the world of cryptocurrencies.