JPMorgan analysts, who have historically maintained a cautious stance on the cryptocurrency market, have shifted their outlook to bullish for 2025. The analysts, led by managing director Nikolaos Panigirtzoglou, cited a combination of factors that could drive further growth in the digital asset space.
One key factor driving JPMorgan’s bullish sentiment is the emergence of the “debasement trade.” As geopolitical tensions rise and the U.S. election approaches, investors may turn to alternative assets like gold and bitcoin to hedge against economic instability. The analysts believe that a potential Trump win could reinforce this trend, with tariffs and expansionary fiscal policy contributing to “debt debasement.”
Additionally, recent developments such as the announcement by traditional wealth advisors like Morgan Stanley to recommend spot bitcoin ETFs to clients, the completion of major liquidations related to bankruptcies, and upcoming cash payments from the FTX bankruptcy are seen as positive catalysts for the crypto market.
The rebound in the stablecoin market, approaching its pre-Terra/Luna collapse peak, is another favorable factor. However, the analysts caution that the passage of U.S. stablecoin legislation is still pending and could significantly impact the market.
While the stablecoin market has expanded in dollar terms, its market share relative to the overall crypto market has remained relatively unchanged. JPMorgan analysts anticipate that the introduction of stablecoin regulations will increase adoption and benefit U.S.-compliant stablecoins.
