- The positive catalysts to drive the price of bitcoin and the broader crypto market are already factored in, according to JPMorgan.
- The positioning in the BTC futures market and macro concerns are keeping the bank cautious on digital assets.
- The bank estimates that the average production cost for mining bitcoin is around $49,000, and any price action below this level would pressure the miners, weighing further on BTC price.
JPMorgan remains cautious on bitcoin and the broader crypto market, despite a recent price bounce. Analysts believe the positive catalysts are already priced in, while positioning in futures and macro concerns persist.
Key Drivers of the Recent Crypto Selloff
Earlier Selloff Driven by Retail and Momentum Traders
The biggest crypto selloff since the FTX implosion was driven by retail investors and momentum traders exiting longs and building shorts. Both crypto and traditional markets have stabilized but concerns remain.
Limited De-Risking Among Institutional Investors
There has been little to no de-risking from institutional investors in bitcoin futures. This shows limited open interest and sideways action on the spot price spread.
Remaining Positive Catalysts Already Priced In
The few remaining positive catalysts seem already accounted for in the current crypto price, according to the bank. These include crypto offerings for Morgan Stanley clients, end of bankruptcy repayments, and favorable US regulations.
Ongoing Causes for Caution
Production Costs and Macro Conditions
JPMorgan analysts estimate the average bitcoin mining cost around $49,000. Prices below this level may further pressure miners and weigh on bitcoin. Equity markets also remain vulnerable.
Positioning in Futures Market
With limited de-risking in CME bitcoin futures and macro weakness, JPMorgan remains cautious on crypto despite the bounce. The bank has been skeptical of any sustained near-term rebound.
Conclusion
The recent crypto bounce does not change JPMorgan’s cautious long-term outlook. While positive catalysts exist, they appear priced in. Meanwhile, positioning data, miner economics, and macro conditions continue to warrant concern. The future direction for bitcoin and crypto remains uncertain.
