JPMorgan’s Analysis of Bitcoin’s Recent Price Movement
JPMorgan, a global investment bank, recently provided its insights into the recent selloff in the crypto market, especially the drop in bitcoin’s price from over $47K to below $39K. This decline coincided with significant outflows from Grayscale’s bitcoin trust (GBTC), which transitioned into a spot bitcoin ETF after receiving approval from the U.S. Securities and Exchange Commission (SEC).
According to JPMorgan strategist Nikolaos Panigirtzoglou, most of the profit-taking from GBTC has already occurred, totaling $4.3 billion. He concluded that this would alleviate downward pressure on bitcoin resulting from this specific channel.
Estimating Continued GBTC Outflows
JPMorgan’s Panigirtzoglou previously predicted that around $3 billion would exit GBTC as investors took advantage of the discount to NAV. He maintained this viewpoint and explained that this $3 billion leaving the bitcoin space through GBTC profit-taking will exert a downward force on bitcoin’s price.
John Todaro, an analyst at Needham, echoed a similar sentiment, noting a decline in GBTC outflows and signaling a potential slowdown in redemptions. He believes that the two significant drivers of selling, namely outflows driven by the FTX estate and arbitrage funds, are nearing completion.
JPMorgan’s Disappointment in Bitcoin ETF Catalysts
Another JPMorgan analyst, Kenneth Worthington, expressed skepticism regarding the impact of bitcoin ETFs on the market. He believes that the catalysts associated with these ETFs will fail to meet market participants’ expectations. In light of this, JPMorgan downgraded Coinbase stock (Nasdaq: COIN) from Neutral to Underweight.
Hot Take: GBTC Profit-Taking Potential Decreasing, But Uncertainty Remains
JPMorgan’s analysis suggests that the majority of profit-taking from GBTC has already occurred, potentially relieving some downward pressure on bitcoin’s price. However, uncertainties regarding future outflows and the overall impact of bitcoin ETFs remain. It is essential to closely monitor market trends and investor behavior in the coming weeks to gauge the full extent of these factors on the crypto market.
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