JP Morgan is bullish on the price of Bitcoin (BTC)

Yesterday, JP Morgan published a report in which various forecasts about the price of Bitcoin (BTC) are discussed following Trump’s victory in the elections. 

The report analyzes the performance of various assets, including gold and Bitcoin, during the course of 2024, and compares them with the trend of Donald Trump’s winning probabilities in last Tuesday’s elections. 

JP Morgan bull on the price of Bitcoin (BTC)

Subsequently, an analyst from JP Morgan explicitly stated they are bull on BTC. 

In relation to the trend until the end of the year, the analyst from JP Morgan stated that they continue to see room for the so-called “Trump trade” for the next eight weeks, similar to what happened in 2016 after his previous election. 

The Trump trade is precisely the analysis reported in the report published yesterday, where it was correlated with the performance of Bitcoin and that of gold.

According to the JP Morgan analyst, it is likely that Trump’s policies will support both until 2025, and that gold and BTC may benefit from a sort of “devaluation” due to the increasing risks associated with tariffs (and therefore international trade) and geopolitics.

This analysis is perfectly in line with the narrative, already widespread in the crypto sector, which claims that after the US presidential elections, the US dollar tends to weaken for months, and that this weakening ends up favoring the rise in the price of Bitcoin.

The Trump Effect on Bitcoin (BTC) Pricing: JP Morgan’s Analysis

In the report, Trump’s economic-financial policy is described as a kind of experiment, despite Trump having already governed for four years from 2017 to 2020. 

It is also said that the markets are excited about the prospects of a deregulation program and the possibility of tax cuts. Furthermore, it is emphasized that in the investment sector it is assumed that entire sectors and industries could benefit, particularly those of finance and criptovalute.

Now that this experiment will begin, most economists, however, predict negative consequences for growth and employment. 

So according to JP Morgan, on one hand, there could be a good period for finance (and cryptocurrencies) at least from now until the end of the year, while on the other hand, in the medium/long term, there could be a less good period for the economy. 

The effect of Trump’s policies on finance could continue next year as well, given that he will officially take office as President of the United States only on January 20, 2025. 

Bitcoin Price Forecast

These bullish forecasts by JP Morgan on the price of Bitcoin are perfectly in line with other forecasts by other analysts. 

There is an underlying reason that drives many analysts to agree on a possible further bull path for BTC. 

Everything is linked to the apparent inverse correlation between the trend of Bitcoin’s price and that of the Dollar Index (DXY). 

It must be specified, however, that this correlation is not direct, but indirect, and it only manifests over the medium/long term, because in the short term it sometimes does not manifest, or sometimes it even manifests inverted. 

Instead, over the months and years, when the Dollar Index falls, the price of BTC tends to rise, and vice versa. 

The weakening of the dollar

At the base of the numerous bull forecasts on BTC is the hypothesis that the US dollar may weaken in the coming months. 

First of all, it is quite common that after the presidential elections the Dollar Index starts to fall, and then ends up falling for several months. 

Furthermore, before the elections, it strengthened, moving in just over a month from 100 to 104.5 points. 

It is true that on the day of Trump’s victory it also rose up to 105.3 points, but it was just a temporary spike irrelevant in the medium/long term. 

Currently, it is still at 104.5 points, which is the same maximum level it had reached in recent times before Tuesday’s elections. Therefore, its decline has not yet begun, and to be precise, in 2016, for example, it began only in December, more than a month after the last election of Trump. 

Between 2017 and 2018, in the midst of the bullrun crypto, it dropped from 103 to 89 points, and even in 2020, it ended up dropping to about 90 points. 

At this point, it seems easy to predict that even in 2025 it could drop and return to 90 points. 

The cycle of Bitcoin

To all this, it should be added that not only do the USA presidential elections have a 4-year cycle, but so does Bitcoin. 

Until today, there have been four Bitcoin halvings, all occurring in the year of the United States presidential elections (2012, 2016, 2020, and 2024). 

It is difficult to imagine that it is a coincidence, also because the four-year cycle of Bitcoin was arbitrarily decided by Satoshi Nakamoto with a precise idea in mind, even if we do not know which one. 

The halving reduces the inflation of the monetary mass of BTC, and it hardly does so in the year of the US elections by pure chance. In fact, the reduction of the inflation of the monetary mass produces a reduction in market supply, while the weakening of the US dollar after the elections should increase its demand. These two apparently opposing dynamics, but in reality converging, have so far always ended up adding up and amplifying the growth of the market value of BTC in this way.