The analysts from the bank consider Bitcoin must face its volatility and its boom-bust cycles, which hinder institutional adoption. While Russian authorities announced they would treat cryptocurrencies as currency analogs, Ireland could ban retail investors from interacting with the industry.
American investment bank JP Morgan recently said that the actual value of Bitcoin (BTC) is about 12% below the current trading price. In that regard, the strategists from the entity estimate that it is USD 38,000, based on its volatility compared to gold.
The analysts from JP Morgan have stated that the biggest challenge that the pioneering cryptocurrency must face is precisely its volatility. Besides, they believe that its boom-bust cycles prevent the further development of institutional adoption.
Although that analysis refers to Bitcoin in the short term, the specialists are more optimistic in the long run. The leader of the strategists, Nikolaos Panigirtzoglou, places the long-term theoretical target for its actual value at USD 150,000, compared to USD 146,000 last year.
The Government and the Central Bank of Russia Will Treat Bitcoin as a Currency
In recent days, the Russian government and central bank announced that they reached an agreement on regulating cryptocurrencies. In that sense, they are currently working on a bill that they will release next week.
They will define in the draft law that cryptocurrencies are currency analogs rather than digital financial assets. They stated that people could only use them in the legal sector if the banking system or authorized intermediaries give them a complete identification.
Irish Central Bank Bans Retail Funds from Investing in cryptocurrencies
The Central Bank of Ireland recently made statements about cryptocurrency investments that could affect how retail investors interact with the industry.
In its annual Securities Markets Risk Outlook report, the bank said it was highly improbable to allow retail investments in the cryptocurrency market.
They specifically refer to funds regulated by Ireland, aimed at non-professional investors, including Undertakings for Collective Investment in Transferable Securities (UCITS) and alternative investment funds (AIF).
The former invest in securities, and the European Union regulates them. They target retail investors and represent about three-quarters of the funds domiciled in Ireland.
The Price of Bitcoin Is in the Profit-Taking Zone with a Ceiling at USD 45,000
Although the bulls want to confirm a pullback in the trend, analysts consider that the price is in a profit-taking zone. The latter said that they expect USD 45,000 to stand as a resistance.
The price action of Bitcoin continues to tempt investors. Besides, the concerns over the global economy and rising inflation raised warnings that the upcoming interest rate hikes by the Fed could further hurt the market.
The value of BTC has hovered around the USD 43,000 support after rebounding by 20% from USD 37,000 over the past week.
Bitcoin is trading at around USD 42,260 and has accumulated a profit of 1.5% in the last week. Its daily trading volume is above USD 19.76 billion, and its market capitalization is about USD 802.30 billion, according to CoinGecko.
By Alexander Salazar
