J.P. Morgan JPM Analysts have questioned the recent surge in the crypto market, calling it “exaggerated.” They attribute the rally to two main factors: potential approval of a spot Bitcoin BTC/USD ETF in the United States and recent legal victories for the crypto industry.
However, they remain “skeptical” of both.
“The crypto rally seems exaggerated,” said Nikolaos Panigirtzoglou, who leads JPMorgan’s analyst team The Block. reported.
They believe that instead of attracting new capital, newly approved ETFs are more likely to see a transfer of existing capital from other Bitcoin products.
This skepticism is further fueled by the lack of investor interest in existing spot Bitcoin ETFs in Canada and Europe.
This analysis precedes that of Benzinga The future of digital assets conference on November 14, where the future of cryptocurrencies and their role in the financial market will be a key topic of discussion.
Analysts also addressed the impact of recent legal victories for Ripple XRP/USD And Shades of grey on the future of crypto regulation.
“It is far from clear that regulatory tightening of the crypto industry will decrease significantly in the future given the degree of unregulation of this industry,” they said.
Another point of contention is the upcoming Bitcoin halving event in 2024.
While some believe this could lead to a rise in the price of Bitcoin, analysts at JPMorgan say the event is already priced in. “This argument does not seem convincing because the Bitcoin halving event and its effects are predictable and, in our opinion, are well-priced into the price of Bitcoin. “, they explained.
Analysts have warned of potential market volatility, indicating the likelihood of a “buy the rumor/sell the fact” scenario after the crisis. SEC Approval of Spot Bitcoin ETFs.