JPMorgan: The S&P 500 could rally even higher and Bitcoin stands to benefit
The stock market and Bitcoin recently have quite a lot of similarities. After the Black Thursday event – which caused Bitcoin price to drop by more than 50% – a recovery happened that eliminated most of the losses in March. The world is still unstable because of the Coronavirus pandemic.
JPMorgan predicts the S&P 500 could go up further – and so can Bitcoin
Bitcoin is currently trading at $ 9,400, up about 30% since the beginning of the year. And FAANG stocks are also rising during the year, skyrocketing as the world adopts digital technologies to cope with the pandemic. For many, this is a good sign, triggered by central bank money printing.
However, according to analysts at JPMorgan, it seems the S&P 500 could go up further. And Bitcoin is facing practical benefits.
Dan Tapiero – Co-Founder-10T Holdings – said JPMorgan is predicting the stock will increase 47% from here. This comes after they recovered about 40% from the March lows. The competent attributed their prediction to their “equity position metrics,” which tries to draw valuations of equities by looking at the size of the bond and cash “universe.”
Wow, Super Bold!
JPM calling for a 47% equity rally from HERE. Don’t think I can ever recall such a daring call from them.
If more people believed, would be contrarian.
Those mkts still too small to absorb. pic.twitter.com/EMzVKidmgR
— Dan Tapiero (@DTAPCAP) June 18, 2020
The shortcoming is that with the higher amount of cash in the boom system as central banks and bonds increase due to central bank purchases, the equity may be relatively low:
“With some of the previous pockets of overextension clearing, we believe than an overall favorable equity positions backdrop will re-assert itself rejuvenating the equity bull market.”
Tapiero thinks this could be a rise in prices for Bitcoin and gold. There is an overwhelming amount of excess money in the stockpiles of investors who can turn to gold and Bitcoin, instead of stocks.
A group of JPMorgan analysts reported on June 11 that over the past few months, cryptocurrencies have been trading like risky assets like stocks. This has changed dramatically compared to a few years ago.
Therefore, stocks should continue to rise higher. And so does Bitcoin.
There are still mixed opinions
However, not everyone believes that stocks (and even Bitcoin) are ready to continue higher, especially when the underlying economy is still a bit weak due to the pandemic.
Jeremy Grantham, a well-known stock trader, told CNBC that he saw clear signs of a stock bubble.
“This is really the real McCoy,” says legendary investor Jeremy Grantham on whether the recent rally is a sign of a bubble to come. “This is crazy stuff.” pic.twitter.com/XetUBqqPBk
— CNBC’s Closing Bell (@CNBCClosingBell) June 17, 2020
Meanwhile, Scott Minerd, Global CIO of Guggenheim Partners, made a very similar comment just a week earlier. He also said that he sees bubble-like properties on the stock market.
If stocks crash, so does Bitcoin – just like in March.
You can also check Bitcoin Price here.
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