Crypto weekly update
2. June 2022  • clock 5 min •  Daniel Mitrovsky

JP Morgan Predicts Bitcoin Price Growth – Crypto Weekly Update

This week, the total market capitalization exceeded 1.15 trillion EUR. The decrease at the 7-day interval is 1.71%. Bitcoin decreased by 0.52% during the week to a current value of over 28 000 EUR. Bitcoin dominance is 46.1%.

Source: Coinmarketcap

JP Morgan Predicts Bitcoin Price Growth

The latest report from one of the largest investment banks in the world shows that JP Morgan expects Bitcoin price to increase to its fair value in the short-term horizon.

According to the report, Bitcoin is trading at a discount of up to 28% at the current price level, as the investment giant set bitcoin’s fair value at $38,000, based on its analysis. The figure was based on the premise that BTC is around four times more volatile than gold. Meanwhile, it increased its long-term price target to $150,000 from $146,000.

Moreover, the bank believes BTC could recover stronger than other beaten-down assets because it had fallen far deeper amid the correction period.

JP Morgan further states in its report that cryptocurrencies are now among their preferred alternative assets over real estate in the ranking of alternative investments. However, these assets do not fall into the same category as stocks and bonds.

With bitcoin down more than 60% from its ATH last November and the total capitalization of the crypto market down from $3 trillion to $1.3 trillion, the bank sees an opportunity in this fast-growing asset class. Source

Back Above $30,000

After weeks of bleak price correction, Bitcoin finally started to show signs of recovery and capital inflows from investors during this week.

On Monday, the leading cryptocurrency surpassed the $30,000 price level, which market analysts consider a critical psychological threshold. Currently, the volatility of bitcoin and altcoins is highly correlated with the stock market, which amid rising macroeconomic uncertainty, is experiencing similar declines as the crypto market. Silicon Valley technology stocks have been among the hardest hit this year, with giants like Amazon and Tesla posting heavy double-digit losses (34.8% and 36.6%, respectively).

Although Bitcoin has had a couple of really tough and uncertain weeks, it rose over 5% as global stocks and U.S. futures rallied. European and Asia-Pacific stocks surged as traders have started to place bets on Fed adopting a less aggressive tightening policy over the coming months.

Nevertheless, Bitcoin is still a long way from its all-time high reached in November 2021, when it traded for an astronomical $69,000. The cryptocurrency market now has a long and uneasy road ahead, but patience is key to success in investing. Source

Russia’s Central Bank is Considering Using Bitcoin

First Deputy Governor of the Russian Central Bank, Ksenia Yudaeva, said in a statement to Russian media on Tuesday that the bank is open to the idea of using cryptocurrencies for cross-border settlements.

“In principle, we do not object to the use of cryptocurrency in international transactions,” Yudaeva said. Yudaeva then went on to clarify that the Central Bank still believed cryptocurrencies created “great risks” for Russian citizens and Russia’s financial infrastructure.

The Central Bank’s announcement comes as legislators prepare a new version of a digital currency law. Government departments and lawmakers have struggled to reach a consensus on the acceptance and usage of cryptocurrencies within the Russian Federation since the beginning of the war with Ukraine and the ensuing sanctions.

This statement is not the first attempt regarding the use of cryptocurrencies in the Russian Federation. A few weeks ago, the Minister of Industry and Trade Denis Manturov stated that crypto payments in Russia will be legalized sooner or later. In addition, Ivan Chebeskov, the Ministry of Finance’s Financial Policy Department, also stated last week that the ministry was actively discussing using cryptocurrencies for international settlements. Source

Terra Launches New Chain

Over the past week, supporters of the Terra blockchain project voted to launch a new “Terra 2.0” chain without the algorithmic stablecoin UST.

The proposal labeled “Proposal 1623 – Terra Builders Alliance: Rebirth Terra Network” garnered the support of 65.5% of the community, while only 13.5% were opposed, and 21% abstained. The proposal aimed to create a new network, rename the original blockchain to “Terra Classic”, and change the ticker of the native token from LUNA to LUNC. The proposal also included the redistribution of new LUNA tokens between LUNC and UST holders based on different redistribution terms and the linear release of tokens.

The new Terra chain was launched on Saturday, 28 May at 8:00 CET. However, only 21% of the total supply has entered circulation so far, with the rest to be released linearly over the next 4-5 years. Source

Bitcoin Network Difficulty has Significantly Dropped

Less than a month ago, the Bitcoin network witnessed a crucial moment in which the Network Difficulty parameter reached an all-time high of 31.251 trillion units.

The difficulty parameter measures how hard it is to mine a Bitcoin block, or how hard it is to find a hash below a certain target value. If the difficulty parameter grows, it means that more computing power is needed to mine new blocks, which ultimately makes the network more secure.

The last adjustment of this parameter, which is regularly updated once in 2016 blocks, has brought slightly negative news. As of May 26, 2022, this parameter has fallen by as much as 4.33%, from 31.251 trillion to 29.897 trillion, breaking a 10-month streak of growth in the network difficulty.

Despite a decline of more than 4%, the Bitcoin network is still the most secure blockchain network in the entire crypto space. The more secure the network is, the less likely it is that one entity could take control of the network. If someone controlled 51% of the network’s total computing power, they could carry out a so-called double-spending attack. Source

Curiosity: The SEC Continues to Reject Spot ETFs

The U.S. Securities and Exchange Commission (SEC) continues its streak of denying applications related to the launch of the first bitcoin spot ETF.

The latest entity to be rejected was hedge fund One River Digital, which was denied a rule change by the SEC that would have allowed the company to list a fund called the “One River Carbon Neutral Bitcoin Trust” on the NYSE’s New York Stock Exchange.

The SEC said that in considering the proposed rule change, One River used “the same standard that the company has used in its previous applications relating to the listing of bitcoin-based commodity trust.“ According to the SEC, the proposed rule change does not comply with the U.S. Commission’s fraud prevention rules.

Thus, whether investors will ever see a spot ETF remains questionable. However, companies such as Fidelity Investments, Global X, New York Digital Investment Group and Grayscale will continue to fight for the launch of a spot ETF in the United States, according to their statements. Source

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Daniel Mitrovsky


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