JPMorgan Draws a Bullish Scenario for Bitcoin and Cryptocurrency Market: Here’s What They Expect

Crypto even JPMorgan analysts, who showed a cautious outlook in the market throughout 2024, stated that they now have an upward stance for 2025.

In a report titled Alternative Investments Outlook and Strategy published late Friday, the team led by managing director Nikolaos Panigirtzoglou outlined several factors that could contribute to the growth of digital assets in the coming years.

Analysts have noted the rise of “depreciation trading,” where investors are increasingly turning to alternative assets such as gold and Bitcoin as a hedge against economic instability. With geopolitical tensions escalating and the upcoming US presidential election, institutional investors such as hedge funds may view gold and Bitcoin as favorable assets, according to analysts. But analysts Ethereum’un (ETH) He stated that he may not benefit much from this trend.

A possible Trump victory in the elections in 2024 is also seen as a regulatory supporting factor for Bitcoin. According to analysts, such a scenario could strengthen the depreciation trade through tariffs linked to geopolitical tensions and expansionary fiscal policies that could contribute to “debt depreciation”. They emphasized that while a Trump win is a “very low probability” currently priced in other asset classes, the probability remains significant for the crypto market.

JPMorgan’s report listed additional reasons for optimistic views on digital assets. These include recent moves by traditional financial institutions such as Morgan Stanley, which has begun allowing wealth advisors to recommend spot Bitcoin ETFs to their clients. Analysts also believe Mt. Gox and Genesis bankruptcies and the German government’s Bitcoin sale are over, suggesting that most of the selling pressure has subsided.

The report also stated that cash payments from the FTX bankruptcy are expected to be made in late 2024 or early 2025. Once distributed, these funds could potentially be reinvested in cryptocurrencies and provide additional market support.

JPMorgan analysts observed that the stablecoin market is recovering, with market capitalization approaching $180 billion levels before the Terra/Luna crash. However, they warned that stablecoin legislation in the US is pending and will likely be passed by Congress in 2025. The enactment of such regulations is expected to increase the adoption and mainstream acceptance of US-compliant stablecoins while creating challenges for those that are not compliant. The report specifically noted that regulations could have a significant impact on Tether.

Despite the overall growth of the stablecoin market in dollar terms, analysts note that this primarily reflects the broader increase in cryptocurrency market value, with the market share of stablecoins remaining relatively unchanged.

*This is not investment advice.