- The outflow from ETFs and high volatility highlight the weakening narrative of bitcoin as ‘digital gold’.
- The fair value of the leading cryptocurrency is estimated at $71,000.
- An analyst predicted a rally for altcoins with high utility.
High volatility and outflows from BTC-ETFs undermine the perception of the leading cryptocurrency as digital gold, while its traditional counterpart experiences increased demand, according to JPMorgan, reports The Block.
Analysts anticipate further growth in precious metal prices as the main beneficiary of the debasement trade strategy.
They noted that gold has risen to a record $3100 per ounce, while bitcoin has depreciated since the beginning of the year due to its correlation with stocks.
According to JPMorgan, the current rate of $83,700 exceeds the estimated production cost of $62,000, which has “historically served as an empirical lower bound for prices.”
Experts calculate that the fair price for bitcoin is $71,000, considering volatility and compared to the $5 trillion capitalization of gold held by private investors. An additional $4 trillion is held by global central banks. In total, this represents a 3.5% share of global financial assets, they clarified.
And what about altcoins?
Real Vision’s chief analyst Jamie Coutts mentioned a potential “final rally” for altcoins in June.
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According to the expert, only coins with real utility and strong network activity will benefit.
“We will definitely see a recovery in some of these higher-quality names. The question is whether it will be a sustainable rise that lasts for 6-12 months,” Coutts noted.
The chief analyst of Real Vision is convinced that by this time, the price of the leading cryptocurrency will return to its historical high.
Previously, CryptoQuant linked the current drop in ETH/BTC to lows not seen since 2020 with an unfavourable on-chain picture.
Later, the firm’s specialists reported an intensification of bearish conditions in bitcoin.
CryptoQuant’s founder and CEO Ki Young Ju stated the end of the bull run for digital gold. He predicts that in the next six months to a year, prices will either decline or remain sideways.
As reported in Nansen, it was suggested that the crypto market could reach its bottom by June.