It seems there aren't enough buyers to keep bitcoin at record highs, according to a new note from JPMorgan. Bitcoin set another record high on Wednesday above $51,000, pushing the cryptocurrency's year-to-date gains to nearly 80%. The rally in recent weeks is an extension of an even more dramatic run that dates back to last October. Much of the rise has been attributed to increased adoption by major companies, such as Tesla , and financial institution driving up demand for bitcoin. However, the JPMorgan researchers don't believe those numbers add up. The firm estimated that the market cap of bitcoin has increased by $700 billion since the end of September with only $11 billion of inflows from major institutions. Reasons for that divergence could include an inelastic supply of bitcoin, increased retail buying and speculative traders trying to front-run the institutions, JPMorgan said in a note. "It suggests that, after announcements from end-September onwards, real money inflows during Oct/Nov/Dec contributed to the rally in bitcoin prices at the time, while the movements since January this year appear to have been more influenced by speculative flows," the note said. "This also suggests that some pickup in real money flows would likely be needed to sustain current prices in the absence of a re-acceleration of the retail flow." Bitcoin's volatility could also make it hard to hold its new record highs, JPMorgan said. Cryptocurrencies are often referred to as "digital gold," with the traditional metal's market cap seen as a potential size for bitcoin. However, JPMorgan says that, when adjusted for volatility, bitcoin may already be bigger than gold, suggesting a pullback is coming. "In other words, bitcoin, at current market prices, has already more than doubled relative to gold in risk capital terms. In our opinion, unless bitcoin volatility subsides quickly from here, its current price of $48k looks unsustainable," the note said.
