JPMorgan Analyzes Bitcoin’s Performance as April Concludes
JPMorgan has recently assessed the performance of Bitcoin, noting that the cryptocurrency has significantly outshined gold over the past year. The outlook for Bitcoin appears increasingly optimistic, especially when compared to its price just a few months prior, when it was hovering around $80,000. The investment bank’s examination reveals that Bitcoin’s price momentum has continued to build into May.
Market Dynamics and the Influence of Political Events
The initial months of the year were challenging for Bitcoin, coinciding with U.S. President Donald Trump announcing extensive tariffs that raised concerns of a potential global trade conflict, subsequently impacting global financial markets. Although Trump advocated for pro-cryptocurrency policies during his tenure, his first 100 days did not yield any notable increases in cryptocurrency values or regulatory shifts, as highlighted in JPMorgan’s note dated May 14. However, with Trump’s recent retreat from aggressive trade stances and increased indications of widespread cryptocurrency adoption by corporations and nations, market sentiment has improved.
The Bullish Perspective on Bitcoin
David Marcus, a notable Bitcoin supporter and former executive at PayPal, expressed a strong bullish sentiment on May 10, proclaiming that the case for Bitcoin has never been more compelling. He encouraged investors to prepare for potential market shifts. As of May, Bitcoin has surged by 10% since the beginning of the month, trading at an impressive $103,500. JPMorgan released six charts to illustrate Bitcoin’s recovery trajectory.
Bitcoin’s Resurgence and Exchange-Traded Products
Bitcoin’s earlier decline has reversed, with a notable increase in inflows into exchange-traded products (ETPs), including Bitcoin ETFs from established firms like BlackRock and Fidelity. In April, these products experienced their most successful month since January, with total cryptocurrency market capitalization climbing to $2.9 trillion, reflecting a 10% month-over-month growth, though trading volumes have remained subdued thus far in May. BlackRock’s IBIT ETF emerged as the standout performer, capturing 84% of total Bitcoin ETF flows, which amounted to $3 billion in April.
Dominance of Bitcoin ETFs
The Bitcoin ETF landscape is currently led by BlackRock’s IBIT, which commands a substantial 52% share of the market, according to data from Dune Analytics. Since their inception in 2024, Bitcoin ETFs have attracted a cumulative $96 billion in investments, vastly overshadowing Ethereum ETFs, which have gathered $5 billion in assets.
Market Reactions to Political Turmoil
April was marked by volatility stemming from Trump’s tariff announcements, which initially caused market instability. The Nasdaq, often correlated with Bitcoin’s performance, spent much of April approximately 15% below its value on the day of Trump’s inauguration. However, the market has shown signs of recovery, with Bitcoin surging past the $100,000 mark. By the end of April, Bitcoin’s market capitalization had rebounded to $1.87 trillion, reflecting a 14% increase month-over-month, largely driven by strong performance during the last week of the month.
Bitcoin’s Stability Compared to Gold
Larry Fink, CEO of BlackRock, has emphasized Bitcoin’s potential as a safe-haven asset akin to gold. Despite this assertion, JPMorgan’s analysis indicates that Bitcoin has yet to fully demonstrate this status. Notably, Bitcoin’s volatility has decreased, with both Bitcoin and gold showing a reduction in their 30-day volatility rates, as reported by CoinGlass. When normalizing performance metrics, Bitcoin has outpaced gold, gaining 15% compared to gold’s 5% increase by the end of March.
Public Crypto Companies Experience Market Changes
Publicly traded cryptocurrency companies have witnessed a contraction in market capitalization, decreasing by 34% from a post-election peak of nearly $120 billion in November 2024 to $76 billion by the end of April. Nevertheless, April brought a silver lining, with a 19% month-over-month increase in overall market cap. Galaxy Digital, which announced plans to go public in the U.S. during April, was the largest gainer, enjoying a 45% increase in market cap throughout the month. Additionally, Coinbase’s inclusion in the S&P 500, effective May 19, propelled its stock price up by 16%, contributing to an 18% overall market cap increase month-over-month.
