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JPMorgan’s Strategists: BTC Rally Will Not Last Unless Volatility Reduces

Strategists from JPMorgan Chase have recently opined that the largest cryptocurrency by market cap, Bitcoin (BTC), needs to disassociate from its increased volatility to sustain its current bull run. 

The strategists led by Nikolaos Panigirtzoglou noted in a report that BTC’s current price of above $51,000 is “not sustainable” unless the cryptocurrency eases its high volatility. 

BTC Volatility Not New, Sparks Controversy

BTC’s volatile nature has been a major topic of discussion among global financial experts since 2017. 

The asset, which spiked as high as almost $20,000 in early 2018, plunged below $10,000 that year. 

This unfavorable price swing has sparked debate among traditional financial players as they believe the asset is not yet a suitable investment option to venture into. 

Volatility Gradually Fades With Institutional Involvement

Although Bitcoin suffered a terrible fate in 2018, its massive volatility at the time was caused by retail investors who felt they should sell their BTC holdings after making massive profits. 

Interestingly, the current bull run is different from that of 2018. For one thing, there was a massive inflow of institutional investors in the market last year, which started after MicroStrategy announced it would use part of its cash reserve to buy Bitcoin. 

Since the announcement was made, several firms have also made similar moves buying large amounts of cryptocurrency, including Tesla’s $1.5 billion investment

The entrance of institutional investors into the market has driven the price of Bitcoin to new heights and given the asset a little bit of control over its volatile nature. 

Presently, the asset has only shredded a few percentages of its value compared to the 2018 massive price swings. 

However, JPMorgan’s strategists appeared not to believe that institutional investors championed the BTC rally. Instead, they believe other factors like the asset’s limited supply, among other things, are pumping the asset’s value. 

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

Either way, things are surely looking up for bitcoin as several more institutional investors, including famous banks, are joining the trend.

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