JPMorgan: Bitcoin retail demand will be high

JPMorgan analysts believe that retail demand for bitcoin will remain high for almost a year before the next halving (halving the reward for mining) in the network of the leading cryptocurrency, writes RBC Crypto with reference to CoinDesk.

The halving should happen around April 2024. This event, by reducing the income of miners, will double the cost of bitcoin mining to about $40,000, which will create a positive psychological effect, the bank said in a report.

This is due to the fact, analysts explained, that historically the cost of mining BTC has acted as an effective lower limit of its price. The halvings in 2016 and 2020 were “accompanied by a bullish trajectory for the price of bitcoin,” which accelerated after they occurred, the bank noted.

The recent rise in retail demand can be partly attributed to the emergence of NFTs and BRC-20 tokens on the bitcoin network, however, more importantly, “retail investor demand for bitcoin is likely to grow as we approach halving,” analysts at JPMorgan write.

Institutional demand for bitcoin, by contrast, is falling as large investors are deterred by fraud, increased volatility of the digital currency and pressure from US regulators, which has led to increased uncertainty, the report said.

In February, a JPMorgan survey revealed low interest from institutional traders in cryptocurrencies. Only 8% of respondents reported that they are engaged in crypto trading, 6% of participants planned to do it within a year, another 14% – within five years. 72% of the traders surveyed said they were not going to trade cryptocurrencies.

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