JPMorgan: The cryptocurrency rebound is unlikely to last, and if Trump becomes president, it will benefit Bitcoin and gold

ChainCatcher news, according to The Block, JPMorgan analysts indicate that any rebound in cryptocurrency prices may be tactical (temporary and strategic) rather than the beginning of a lasting upward trend. They point out that Bitcoin's current price is around $67,500, which is high compared to its production cost of about $43,000 and the volatility-adjusted gold price (around $53,000).

In a report on Thursday, JPMorgan analysts wrote that the difference between Bitcoin's price and JPMorgan's volatility-adjusted gold price "suggests mean reversion near the zero line, thereby limiting the potential for long-term Bitcoin price increases."

The analysts reiterated that with the reduction in liquidation volumes after July, cryptocurrencies are expected to rebound starting in August. They noted that Bitcoin futures have recently performed poorly due to the liquidation of Gemini and Mt. Gox creditors, as well as the German government's sale of seized Bitcoins. The analysts stated that these liquidations may fade after July and expect Bitcoin futures to rebound starting in August, in line with the recent rise in gold futures.

The analysts said, "We believe that momentum traders, such as commodity trading advisors, have played a significant role in driving gold futures. Gold's momentum signals surged into the overbought territory of last April in July."

JPMorgan analysts indicated that Trump's potential re-election could benefit gold. The analysts stated that some investors believe Trump is more favorable to cryptocurrency companies and regulation than the current Biden administration. They added that Trump's potential trade policies could lead emerging market central banks, especially the People's Bank of China, to increase diversification investments in gold.