Bitcoin’s record price unsustainable without lower volatility: JPMorgan

PARIS, FRANCE - JUNE 25: In this photo illustration, a visual representation of the digital Cryptocurrency, Bitcoin is displayed in front of the Bitcoin course's graph on June 25, 2019 in Paris, France. Bitcoin surpassed the 11,000 dollar mark Monday, Facebook's arrival on the cryptocurrency market with Libra has boosted global interest around the various currencies in circulation. Bitcoin has reached its highest level since March 5, 2018.(Photo by Chesnot/Getty Images)
LONDON (Reuters) – Bitcoin’s charge to a record north of $50,000 isn’t sustainable unless the cryptocurrency’s price swings cool down quickly, JPMorgan analysts said in a note.



The world’s biggest digital currency hit a record of $51,300 on Wednesday after smashing the $50,000 mark for the first time a day earlier, fuelled by signs it is winning acceptance among mainstream investors and companies.

Bitcoin’s three-month realised volatility, or actual price moves, is 87% versus 16% for gold – an asset proponents say it could threaten, the U.S. investment bank said in a note published on Tuesday.

The value of all bitcoin in circulation has swollen to $900 billion from $200 billion in September, the analysts said. The $700 billion jump has come the back of a total flow of just $11 billion from institutional investors into major trusts and futures markets.

Bitcoin’s limited supply – based on “miners” producing a set number of new coins – has led to a holders charging a premium on bitcoin coming to market, JPMorgan said. Retail flows may have also magnified institutional flows, it added.

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