Marcus Sotiriou, Analyst at the UK based digital asset broker GlobalBlock< /p>
After Bitcoin (CRYPTO: BTC) rallied almost 40% off the lows, it has shown signs of potential weakness since yesterday’s higher than expected U.S. CPI data was released, as it was rejected off the key $45,500 resistance level. To have more confirmation of continued upside, Bitcoin will need to hold above this key level.
According to CoinShares data, Bitcoin and crypto investment funds saw large outflows throughout January as institutional players reduced their positions. However, during the first week of February, around $71 million flowed into Bitcoin – this is the largest amount since early December. This suggests that institutional investors are preparing for higher Bitcoin prices in the coming months.
JPMorgan thinks, however, that Bitcoin is currently above its fair value, as its volatility is the major factor in hindering institutional adoption. Despite this assumption, JPMorgan has confirmed their long-term Bitcoin price prediction of $150,000, whilst pointing to its reduction in supply growth rate and finiteness.
Another major financial institution, Wells Fargo, who have over 70 million customers, posted a bullish report on crypto this week. They compared cryptocurrencies to the internet in the mid-late 1990s, where internet adoption soared exponentially. Wells Fargo claimed that about 13% of Americans traded cryptocurrencies in the past 12 months, which is similar to the internet’s adoption rate in 1995. They noted crypto “could soon hit a hyper-infliction point”, which foreshadows an extremely exciting period for the industry, but also rightly warned that “if history is any guide, many will fail”. Not every bank in America is on board with cryptocurrencies though, as Bank of America said today they are refusing to accept Bitcoin and that is not a safe haven.
I think it is only a matter of time before their stance changes, as Bitcoin becomes adopted, not only by more institutions, but by more countries around the world. It is easy to forget that the JPMorgan CEO, Jamie Dimon, called cryptocurrencies a scam in 2017, before allowing all of its wealth management clients access to cryptocurrency funds in 2021.
