JP Morgan Questions Bitcoin's Role as 'Digital Gold'… Support Level at $62,000

Global investment bank (IB) JP Morgan has taken a critical stance on Bitcoin (BTC)'s role as 'digital gold'.

According to The Block on the 3rd (local time), JP Morgan stated in a recent report, "The volatility of Bitcoin and its correlation with the stock market raise questions about the narrative of Bitcoin as 'digital gold'." JP Morgan added, "Bitcoin already showed a significant increase until the end of last year," and "Due to fundamentally high volatility and risk, as well as its correlation with tech stocks, its returns have been poor this year."

JP Morgan predicted, "Gold will continue to rise as a major beneficiary asset of the 'debasement trade'." The debasement trade is a strategy of investing in assets like gold and Bitcoin to hedge against currency devaluation. JP Morgan analyzed, "Bitcoin futures positions have turned net short since mid-January this year, but gold futures have remained flat," and "There are signals that recent gold demand is coming from individual investors and central banks rather than speculative traders."

JP Morgan suggested $62,000 as the major support level for Bitcoin's price. Bitcoin is trading at around $83,000 on CoinMarketCap today. JP Morgan stated, "The production cost of Bitcoin, $62,000, has historically served as the lower bound of its price."