The Recent Sell-Off in Bitcoin May Be Coming to an End, Says JPMorgan
JPMorgan suggests that the driving force behind the recent sell-off in bitcoin may have reached its peak. The approval of exchange-traded funds (ETFs) earlier this month caused a “sell the news” event for the world’s largest cryptocurrency, which led to a 20% drop in its price. JPMorgan strategist Nikolaos Panigirtzoglou believes that the main source of selling pressure has come from the Grayscale Bitcoin Trust (GBTC), which saw significant outflows after its conversion to an ETF. However, Panigirtzoglou sees these outflows as profit-taking rather than a shift to other options and expects them to slow down soon.
GBTC Outflows and Other Bitcoin ETFs
Despite the outflows, GBTC still manages around $20 billion in assets. On the other hand, other bitcoin ETFs like iShares (IBIT) and Fidelity Wise Origin (FBTC) are experiencing significant inflows, with both funds surpassing $1 billion. While these numbers may not meet the optimistic estimates of some crypto enthusiasts, they are still substantial compared to other ETF launches.
Conclusion
The recent sell-off in bitcoin driven by the approval of bitcoin ETFs may be nearing its end, according to JPMorgan. The main selling pressure has come from GBTC, which experienced heavy outflows as investors took profits on their previous investments made at a discount. However, JPMorgan believes that most of the downward pressure from this source has already occurred and expects the outflows to slow down. Despite this, GBTC still manages a significant amount of assets. Meanwhile, other bitcoin ETFs are seeing substantial inflows, although they fall short of some optimistic predictions.
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