The market of Cryptocurrencies operate with general increases This Thursday and Bitcoin (BTC) is one step away again from the US$60,000in a round in which Ripple (XRP) jumped by more than 20%, standing out. This occurs amid the widespread volatility of the last few days due to the collapse of global stock markets last Monday.
In this context, The world’s largest cryptocurrency by market capitalization, experienced a 6.4% advance, to US$59,473, after having touched five-month lows earlier in the week (around $40,000).
However, Bitcoin has still failed to recover pre-crash levels, reflecting investor caution amid concerns about U.S. economic growth and rising interest rates in Japan.
For its part, XRPthe cryptocurrency associated with Ripple Labs soars more than 22% to $0.6 after a court in the Southern District of New York imposed a fine of US$125 million for violations of securities law in its institutional sales of XRP. The fine, much smaller than the US$2 billion which had been requested by the US Securities and Exchange Commission (SEC), was seen as a victory by Ripple CEO, Brad Garlinghouse, who stated that this decision gives them the clarity necessary to continue the growth of the company.
Bitcoin: JPMorgan remains “cautious” despite recent recovery
JPMorgan remains cautious on cryptocurrency markets, although Bitcoin managed to recover somewhat after having its worst day since the collapse of Sam Bankman-Fried’s FTX empire in November 2022.
The flagship cryptocurrency plunged more than 15% on Monday before rebounding around 5% the next day. The trigger was not specific to cryptocurrencies, but rather a contagion of the correction in traditional risk assets, such as stocks.
Last week’s weak US jobs report, coupled with rising jobless claims, amplified fears of a US recession. At the same time, the Bank of Japan’s rate hike raised concerns about a broader dismantling of the yen carry trade. This double shock triggered a correction in risk assets, especially stocks and cryptocurrencies, and a rally in safe assets such as government bonds, the yen and the Swiss franc.
Having said that, JPMorgan analysts suggest that a certain cryptocurrency trading firm played a role in the sell-off by liquidating large amounts of Ether. Retail investors also contributed to the market chaos, with spot bitcoin ETFs seeing their biggest monthly outflow in August.
“Momentum traders, including CTAs, have been exiting long positions and building short positions,” JPMorgan said, exacerbating the decline.
According to JPMorgan, several factors are contributing to institutional optimism. Morgan Stanley now allows its wealth advisors to recommend spot bitcoin ETFs to their clients.
Additionally, the bulk of liquidations from the Mt. Gox and Genesis bankruptcies are likely already behind us, and upcoming cash payouts from the FTX bankruptcy could further increase demand in the cryptocurrency market. Both major political parties in the US have indicated their support for favorable cryptocurrency regulations in 2025 and beyond.
Bitcoin recovered from a low of around $49,000, a level that matches JPMorgan’s central estimate of the cost of producing bitcoin. “Had the price remained at or below this level for an extended period, it would have put pressure on bitcoin miners, potentially leading to further declines in bitcoin prices,” the Wall Street bank explained.
Even with these optimistic signs, JPMorgan believes they are largely already priced in.With limited de-risking in the CME bitcoin futures space and equity markets still looking vulnerable, we remain cautious on the cryptocurrency market despite the recent correction,” the report concluded.
Source: Ambito
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