Since the assassination attempt on former President Donald Trump on Saturday, the price has risen by about 9% and now stands at around $64,000.
While momentum is building, the price action is sparking debate. Some skeptics believe it could be overvalued.
Prior to the incident, the price of Bitcoin had been trading lower in recent weeks due to massive liquidations by Gemini creditors, Mt. Gox creditors and the German government.
The German government has been getting rid of bitcoins that were previously seized in criminal activities.
As JP Morgan analysts noted in a recent publication, these sell-offs are expected to taper off after July.
“We continue to look for a rebound in the CME bitcoin futures position proxy in August to catch up with the recent rise in the position proxy,” the report stated.
That said, JP Morgan analysts warn that any recovery in the cryptocurrency market is likely tactical rather than the start of a sustained uptrend.
“This is because the price of bitcoin is too high at present, not only compared to its cost of production (currently $43,000), but also compared to gold, which currently stands at $53,000,” the analysts wrote in a note.
The bank's analysis highlighted a key metric that tracks the difference between the price of bitcoin and the implied price that matches the market value of the private sector's total gold holdings on a volume-adjusted basis.
“This metric points to a mean reversion around the zero line, limiting any upside potential for bitcoin prices in the long term,” JP Morgan explains.
The likelihood of a Trump victory increased even further after the events of last weekend, with betting odds rising to around 70%, up from 60% before last weekend and 50% before the June 27 presidential election debate.
Bitcoin price is benefiting from the increased chances of a Trump victory as some investors view his second presidency as more regulatory-friendly.
