Analyst who was behind a bearish bitcoin note now predicts a comeback

Bitcoin fever could return to Wall Street.

The J.P. Morgan analyst behind a report that found major firms are losing interest in cryptocurrencies isn't ruling out renewed interest.

Nikolaos Panigirtzoglou wrote on December 15 that participation by financial institutions in bitcoin trading was fading. On Tuesday, he said on CNBC's "Futures Now" that the situation is likely temporary.

According to Panigirtzoglou, the firms should renew interest in crypocurrencies as stability grows.

"The stability that we are seeing right now in the cryptocurrency market is setting the stage for more participation by institutional investors in the future," he said. "The cryptocurrency market was a new market. It went through a bubble phase [and] the burst."

He expects the firms will begin re-entering the space as the importance of blockchain — the digital system that records cryptocurrency transactions — grows.

However, Panigirtzoglou contends it could be years away.

"The big obstacle is regulators right now," Panigirtzoglou said, adding that regulatory oversight is a "bit slow to realize."

During bitcoin's epic breakout year in 2017, it soared to $19,783.21. This week, it's been trading just under $3,500, an 83 percent plunge from its all-time high.

Correction: This story was revised to correct the percentage drop in bitcoin's price.

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