Crypto market rebound expected to be temporary, the bank said.

JPMorgan said the bitcoin price was still too high relative to its production cost and versus gold.

Bitcoin and gold are both expected to benefit from the higher likelihood of a Trump election win, the report said.

Any rebound in cryptocurrency markets in the near term is likely to be tactical in nature and not the beginning of a new long term bullish uptrend, JPMorgan (JPM) said in a research report last week.

The bank said this was because the price of bitcoin (BTC) is currently too high versus its production cost of $43,000, and relative to its volatility-adjusted comparison to gold, which is $53,000. Bitcoin was trading around $67,220 at publication time.

JPMorgan notes that momentum in bitcoin futures has been weak in recent weeks due to BTC liquidations by creditors of Gemini, Mt. Gox creditors and the German government.

Liquidations are expected to subside this month and the bank continues to look for a rebound in Chicago Mercantile Exchange (CME) bitcoin futures positioning into August.

Bitcoin and gold are both expected to benefit from the higher likelihood of a Trump election win, as a “second Trump presidency is seen by some investors as more friendly towards crypto companies and towards crypto regulations, in contrast to the current Biden administration,” analysts led by Nikolaos Panigirtzoglou wrote.

There is speculation that Trump could announce bitcoin as a strategic reserve asset at the Nashville Bitcoin conference later this week, and this “could trigger a parabolic rise in bitcoin’s price,” according to Markus Thielen, founder of 10x Research.

Read more: Crypto Market Rebound Expected in August, Liquidations to Finish by July-End: JPMorgan