Bitcoin's Price Volatility May Hamper Its Progress Above $50K, JPMorgan Says

The bank's analysts pointed to gold's much lower volatility.

Feb 17, 2021 at 2:13 p.m. UTC
Updated Sep 14, 2021 at 12:12 p.m. UTC

Bitcoin's price volatility needs to subside for the cryptocurrency to continue its stellar rally, according to analysts at investment banking giant JPMorgan.

In a note on Tuesday reported by Reuters, the analysts drew attention to bitcoin's high volatility relative to gold, the classic inflation hedge, as an obstacle to significant gains beyond current levels around $51,000.

"Bitcoin's three-month realized volatility, or actual price moves, is 87% versus 16% for gold – an asset, proponents say it could threaten," the investment bank said.

While bitcoin is increasingly described as "digital gold," skeptics believe the cryptocurrency is too volatile to find wide acceptance in institutional portfolios. Even so, several publicly listed companies such as Tesla and MicroStrategy have diversified cash holdings into bitcoin over recent months.

While crypto traders suggest other prominent companies are likely to follow suit, JPMorgan also said recently that bitcoin's turbulent price action may keep corporates from emulating Tesla's move – a sentiment echoed by Wedbush Securities on Tuesday.

Bitcoin reached a new lifetime high of $51,735 early on Wednesday, taking the year-to-date gain to over 75%, according to CoinDesk 20 data.


Read more about
The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
GameStop Unveils Crypto & NFT Wallet, Beeple's Twitter Account Latest to Phishing Scam Hacks and More

The most valuable crypto stories for Thursday, May 23, 2022.

The most valuable crypto stories for Thursday, May 23, 2022.

CoinDesk - Unknown
2
CoinDesk - Unknown
First Mover Asia: Funds Lost Billions in the Terra Collapse. Here are the Ongoing Effects; Bitcoin Sees Red

When a fund suffers a major dent to its token, the impact reverberates widely throughout the venture funding eco-system; most major cryptos fell despite gains in U.S. equity markets.

When a fund suffers a major dent to its token, the impact reverberates widely throughout the venture funding eco-system; most major cryptos fell despite gains in U.S. equity markets.

CoinDesk - Unknown
3
CoinDesk - Unknown
At Davos, Crypto Is No Longer on the Outside

Cryptocurrencies have taken a prominent role at the World Economic Forum's annual meeting in Davos, despite the mainstream finance world's apparent contempt for the sector.

Cryptocurrencies have taken a prominent role at the World Economic Forum's annual meeting in Davos, despite the mainstream finance world's apparent contempt for the sector.

CoinDesk - Unknown
4
CoinDesk - Unknown
Wall Street Says a Fed Digital Dollar Spells Destruction for Banks

The Federal Reserve is considering whether to launch a CBDC like other nations, and bankers argue that’s a dangerous idea.

The Federal Reserve is considering whether to launch a CBDC like other nations, and bankers argue that’s a dangerous idea.

CoinDesk - Unknown