JPMorgan thinks Bitcoin could fall to $13K after FTX crisis

JPMorgan’s team, led by Nikolaos Panigirtzoglou, predicted that the price of bitcoin could fall to $13,000 due to the turmoil following the FTX collapse.

The cost of producing BTC has also fallen significantly, which could be another reason for the asset’s potential fall.

A gloomy weather forecast

An analysis team from the Wall Street bank estimated that the ongoing crash in the crypto market could intensify in the following days and lead to a further decline in bitcoin’s valuation. The experts determined that FTX’s crisis and the disruption of sister company Alameda Research triggered a “cascade of margin calls” that could push the price of the primary cryptocurrency to as low as $13,000.

JPMorgan’s team believed that the main problem is not the accident of Sam Bankman-Fried’s exchange, but the fact that there are not many organizations that can help:

“What makes this new phase of crypto debacle induced by the apparent collapse of Alameda Research and FTX more problematic is that the number of entities with stronger balance sheets capable of rescuing those with low capital and high leverage is shrinking.”

The drop in bitcoin’s production costs is another factor. Currently, this stands at $15,000, “but it is likely to return to the low $13,000 seen over the summer months,” the team said.

This event could negatively affect bitcoin’s price as certain market participants may see this level as the “lower limit” of this crypto winter:

“The decline in the cost of production may be perceived as negative for bitcoin’s price outlook going forward to the extent that the cost of production is perceived by some market participants as the lower bound of bitcoin’s price range in a bear market.”

Things escalated after Binance’s decision

Despite the current turbulence in the entire crypto ecosystem, it was expected that things would calm down if Binance were to acquire the troubled FTX.

However, the world’s largest crypto platform retracted its intentions yesterday (November 9), saying the latter’s “problems are beyond our control or ability to help.”

The announcement created further panic in the space, and the global market capitalization plunged below $850 billion. Bitcoin, for one, fell to a two-year low of $15,500.