There are reports that Republican candidate Donald Trump will address the Nashville Bitcoin conference on July 27, where he could announce an enhanced role for Bitcoin in the US monetary system or that Bitcoin could be a strategic reserve asset. To prevent China from dominating the crypto industry, Trump has recently hinted towards embracing digital currencies in the US. His impending appearance at the Nashville Bitcoin conference has also triggered high activity in the options market listed on Deribit. These developments have generated optimism for a new bull run in the crypto world where investors are anticipating a steep rise in Bitcoin’s price.
However, analysts at the global investment bank, JP Morgan, believe that any forthcoming rise in Bitcoin prices will be short and will not be the start of a long-term upward trend. They think that the growth potential of Bitcoin is limited due to its high price as compared to its production cost and volatility. The bank estimates Bitcoin’s real price around $53,000 after incorporating its production cost ($43,000) and its volatility-adjusted comparison to gold while it is currently trading at around $67000.
The JP Morgan analysts expect Bitcoin prices to recover in August as current liquidation pressures ease. However, they maintain that Bitcoin’s value is closely tied to gold and is unlikely to sustain significant long-term gains.
However, JPMorgan has also endorsed that a potential Trump victory in the US presidential elections 2024 could benefit both Bitcoin and gold. It appears that JP Morgan is aware that with the Republican party becoming more pro-crypto, appointment of JD Vance as Trump’s VP, and Vance’s past pro-crypto legislation, a Trump re-election could be a game-changer for the crypto industry.
