JPMorgan Strategists Find Current Bitcoin Price “Unsustainable,” says Retail Demand Is Pushing It

The retail demand, which has been strong since January, is showing no signs of abating.

As Bitcoin surpasses $52,000, JPMorgan Chase & Co. strategists are back at calling the current price of the cryptocurrency “unsustainable,” saying the volatility needs to ease to prevent the rally from fizzling out.

The market cap of Bitcoin has reached above $977 billion, rising 1.8x in just over two months.

In the last five months, the market value of the leading cryptocurrency has risen by more than $700 billion while the aggregate institutional inflow was only around $11 billion, strategists led by Nikolaos Panigirtzoglou wrote in a note Tuesday.

It may be limited supply and the retail demand, which “remains strong with no signs of abating,” pushing up the price, they said.

While there is an increase in interest from real money investors, speculative investors seek to front-run it. And retail inflows have significantly magnified the institutional flow, notes the strategists.

Not only the US retail impulse, strong since January, has been a driving force for bitcoin but also for equities.

“Movements since January this year appear to have been more influenced by speculative flows,” the team said.


Source: JPMorgan Report

This “remarkable” jump means that Bitcoin has “already” surpassed gold in risk capital terms, and looking at the biggest bitcoin and gold funds — the 3m realized vol for the Grayscale Bitcoin Trust stands at 113% vs. 16% for GLD, the largest gold ETF by AUM.

Given that bitcoin, at current market prices, has more than doubled relative to gold in risk capital terms, JPMorgan finds Bitcoin prices “unsustainable.” The last time they felt the same was when BTC was at $48k.

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