Jamie Dimon’s JPMorgan Cautions That Bitcoin Price is ‘Too High at Present’

Since the recent assassination attempt on former President Donald Trump, Bitcoin’s price has surged by approximately 9%, currently hovering around $64,000. This uptick in momentum has ignited debates among observers, with some skeptics expressing concerns that the cryptocurrency may be overvalued.

Prior to this incident, Bitcoin experienced a downturn, attributed largely to significant liquidations involving creditors from Gemini and Mt. Gox, as well as the German government. The latter has been liquidating Bitcoin that was previously confiscated during criminal investigations.

Analysts from J.P. Morgan have indicated in a recent analysis that these liquidations are expected to diminish after July. They noted, “We continue to anticipate a rebound in the CME Bitcoin futures position proxy in August to align with the recent gains in the position proxy.”

However, J.P. Morgan’s analysts have also warned that any recovery within the cryptocurrency market is likely to be tactical, rather than indicative of a long-term bullish trend. They emphasized that the current Bitcoin price is elevated, particularly in relation to its production cost of around $43,000, as well as its volatility-adjusted comparison to gold, which is currently estimated at $53,000.

The bank highlighted an important metric that compares Bitcoin’s price with the implied value that reflects the market capitalization of private sector gold holdings, adjusted for volatility. This analysis suggests a tendency for the Bitcoin price to revert to the mean, thereby limiting its upside potential over the long term.

In terms of political developments, the probability of a Trump win has increased following the events of last weekend, with betting odds climbing to about 70%, up from 60% before the weekend and 50% prior to the presidential debate on June 27. Bitcoin’s price appears to be benefiting from this heightened likelihood of a Trump victory, as many investors perceive a second presidential term for Trump as more favorable in terms of regulatory policies.