JPMorgan: Many Factors Create Growth Momentum for Bitcoin in 2025

JPMorgan analysts have turned bullish on the cryptocurrency market, predicting a brighter outlook for 2025.

Gold and Bitcoin as “Saviors” for Economic Instability

JPMorgan, the financial giant that has traditionally been cautious about cryptocurrencies, has now found “a new light” for 2025.

JPMorgan’s research team, led by CEO Nikolaos Panigirtzoglou, has just released a report “Alternative Investment Strategies and Outlook.” In it, they say that there are many factors that will create growth momentum for the digital asset sector in the coming time.

One of those factors is the "debasement trade" trend, which is when investors seek alternative assets - such as gold and Bitcoin - to hedge against economic instability. In the context of escalating geopolitical tensions and the upcoming US presidential election, institutional investors, especially hedge funds, may see gold and Bitcoin as assets that benefit from this trend. Meanwhile, Ethereum (ETH) is not expected to have a similar advantage.

Earlier this month, Standard Chartered Bank warned that Middle East tensions could push Bitcoin below $60,000, but would create attractive buying opportunities for investors.

What does Trump's victory mean?

JPMorgan experts believe that Donald Trump's victory will benefit Bitcoin in terms of regulation and promote the "debasement trade" thanks to tax policies and expansionary fiscal (debt reduction). However, the likelihood of Trump being re-elected is now considered very low when considering assets other than gold and Bitcoin.

Analysts cite additional reasons for optimism about digital assets, including recent announcements from traditional asset managers like Morgan Stanley to allow clients to access Bitcoin ETFs. They also note that liquidations related to the Mt. Gox and Genesis bankruptcies, as well as the German government’s sale of Bitcoin, are nearly complete. Furthermore, cash settlements from the FTX bankruptcy, expected later this year or early next year, could be reinvested in the crypto market.

The stablecoin market cap is close to its peak of $180 billion, similar to the pre-Terra/Luna collapse. However, stablecoin legislation in the United States is still pending, possibly by 2025. Analysts project that stablecoins will become more popular once formal regulations are in place. Compliant stablecoins will benefit, while non-compliant ones may struggle. This regulatory framework could also have a major impact on Tether, the largest stablecoin issuer in the market.

While the stablecoin market is still expanding in USD terms, this growth is largely a reflection of market capitalization, not changes in the stablecoin’s share of the overall market.

Bitcoin is currently trading around $67,000, significantly higher than JPMorgan’s estimated cost of mining BTC of $47,000. However, adjusted for volatility to compare with gold, which is estimated at $63,000, Bitcoin is only slightly higher.