• JPMorgan thinks that Bitcoin may crash like in 2018.
• China’s regulations on btc mining affect the crypto market.
US finance firm JPMorgan predicts Bitcoin’s crash to continue. The finance team headed by Nikolaos Panigirtzoglou thinks that cryptocurrency is in low demand. Panigirtzgoglou believes that the real players of the token have not appeared, so its price is maintained.
As indicated by JPMorgan, the Bitcoin futures curve is at a “backwardation” level. This level indicates that the cryptocurrency has the highest spot price for futures contracts.
Forward contracts on BTC and other cryptocurrencies involve the buyer holding the tokens at a fixed price. Therefore, the buyer will need to set an exact date to withdraw the token to make a profit.
JPMorgan’s Bitcoin price worries
For financial companies that support cryptocurrencies like JPMorgan, it is worrying to see Bitcoin plummet. Strategists remember when in 2018, the cryptocurrency crashed, and futures contracts were affected.
The BTC loss was staggered because the crypto first plummeted at the speculative level and then by contracts. By 2018, the cryptocurrency lost over 80% of its value after reaching its all-time high.
JPMorgan believes this could happen again in 2021. These predictions are based on the thoughts that institutional traders are no longer attracted to crypto investments. The finance company also focuses its findings on the 21-day average of Bitcoin futures over the spot value.
Regulations affect cryptocurrencies
The funding team also believes that one reason Bitcoin is losing steam is because of regulations. The fight against cryptocurrencies is almost daily; it has become a fad rather than a government measure. However, the authorities are trying to include new rules that affect crypto commerce.
For example, last week Gary Gensler, chairman of the Securities and Exchange Commission, called for better protection for crypto investors. Gensler said that the crypto market had planned new investor protection flaws that need to be addressed.
China has also been a major player at the regulatory scheme, especially against btc mining in the region. This is because the country tries to be greener in the economic sense and leave cryptocurrencies aside. Previously the popular government banned crypto trading at the corporate level and sanctioned social networks that talked about crypto.
Due to China’s announcement against btc mining in its region, other countries have expressed their support and acted similarly. However, other governments such as El Salvador have shown their support for BTC and its mining.
Crypto miners need not worry about these apparent setbacks in China because there are other countries to work with. For example, Iran has a very cheap energy service that miners can take advantage of. There are also countries like Kazakhstan and the United States where BTC can be mined without breaking the law.