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Institutional investors are frightened by the protracted crypto-bear market. This is the assessment of a team of analysts at JPMorgan Chase & Co., including global market strategist Nikolaos Panigirtzoglou.
"The participation of financial institutions in Bitcoin trading seems to fade," wrote the JPMorgan team in a research note dated December 14th.
"Key flow metrics dropped dramatically."
Panigirtzoglou says that the encrypted trading volumes have plummeted, as well as the interest in bitcoin futures. This generated an overwhelming fall across the market, he noted.
JPM: the Altcoins are crushing
"Other cryptocurrencies continue to suffer disproportionately during this correction phase," according to the JPM note.
Moreover, JPMorgan claims that the Crypto Winter caused mass friction among unprofitable miners while the hashrate continued to unveil itself in recent months.
"This suggests that prices have fallen to the point where mining is becoming uneconomical for some miners, who responded by turning off their mining facilities"
Meanwhile, market insiders say that the short-sighted focus on mining costs causes analysts to lose sight of the big picture.
Barry Silbert, founder of the Crypto Investment Fund, Digital Currency Group, said that extraction costs are not the appropriate benchmark for assessing the asset class.
"You have to separate the investment decision that a miner is making from the operating cost to extract the bitcoin"
Said Silbert.
Silbert continued to argue that mining encryption operations have a long-term focus; they are not thinking of short-term gains.
"Mining companies that have been created over the past five years have accumulated huge amounts of capital and have the ability to continue mining at a loss. [because they’re going long]".
The Crypto hate of JPMorgan starts at the top
JPMorgan's skepticism towards bitcoin is not new, and comes straight from the top. The managing director of the investment bank, Jamie Dimon, openly hates bitcoin and has often considered it a "fraud".
In October 2018, Dimon – who repeatedly promised to stop talking about bitcoin – reiterated that he despises him, but gave support to the blockchain, saying it is a real innovation.
"I do not give a fuck [about bitcoin]"Dimon said." Blockchain is real, it's technology, but bitcoin is not the same thing as a legal currency. "
Jamie Dimon: I Do not Give a Sh * t & # 39; on Bitcoin https://t.co/ONqPzk2wz6
– CCN (@CryptoCoinsNews) 31 October 2018
In September 2017, Dimon promised to lay off any JPMorgan operator engaged in bitcoin business. "I would fire them in a second," he said.
While Jamie Dimon continues to protest too much about Bitcoin, other investment bankers have a less emotional vision.
As the CCN reported, Allianz chief economist Mohamed El-Erian said bitcoin will survive the current market sell-off because it is here to stay. However, he does not believe that cryptocurrencies will soon replace fiat money.
Crypto Evangelists: 2019 Will Be Epic
Meanwhile, the virtual currency industry is preparing for a milestone in 2019 in anticipation of an increase in institutional investments.
The founder of Galaxy Digital, Mike Novogratz, a former member of Goldman Sachs, said he expects bitcoin prices to reach new highs in 2019.
As for the critics who are mocking the bitcoiners for their current market difficulties, Novogratz joked: "The revolutions do not happen from one day to the next".
Bull Call: Novogratz says that Bitcoin will see Record Highs in 2019 https://t.co/JiGEZCre5q
– CCN (@CryptoCoinsNews) 6 November 2018
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