Bitcoin’s price has declined by over four percent in the past 24 hours, reaching approximately $88,000, marking a one-week low. The global market capitalization of Bitcoin currently stands near $1.77 trillion, with a 24-hour trading volume close to $48 billion. Despite this recent downturn, JPMorgan remains confident in Bitcoin’s long-term potential, maintaining its price target of $170,000. According to JPMorgan analysts, this target accounts for Bitcoin’s price volatility and mining costs.
A significant market player is the Strategy Investment Group, recognized as the largest corporate holder of Bitcoin with nearly 650,000 coins. The company’s enterprise value to Bitcoin holdings ratio is 1.13, which JPMorgan views positively, indicating no immediate need to liquidate Bitcoin assets. The group has also established a $1.44 billion reserve to cover dividends and interest payments for at least 12 months, ensuring financial stability.
Meanwhile, Bitcoin mining faces challenges as both the hash rate and mining difficulty have decreased. Expensive miners outside China are retreating due to rising electricity costs and falling prices, increasing selling pressure in the market. JPMorgan estimates Bitcoin’s production cost at around $90,000, lower than the previous month.
Margin investors remain cautious; BlackRock’s iShares Bitcoin Trust has experienced six consecutive weeks of net outflows, exceeding $280 million withdrawn. This trend reflects waning interest among traditional investors, especially following the major crypto market crisis in October.
Despite current price weakness, JPMorgan analysts suggest that future significant price movements will depend less on miners’ behavior and more on the Strategy Investment Group’s ability to maintain its Bitcoin holdings. Additionally, the anticipated MSCI index decisions in January may have a notable market impact. Bitcoin’s price has also weakened relative to gold, indicating that its buying momentum has not fully recovered. Prices appear stable near $88,000, though market tension persists.
Source: bitcoinmagazine
