JPMorgan Issues Surprise Bitcoin ETF Prediction After Sudden Price Surge


BitcoinBTC has suddenly rebounded from a crash under $40,000 per bitcoin, climbing back from what some thought was a “critical” price level.

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The bitcoin price has swung wildly following the debut of a fleet of spot bitcoin exchange-traded funds (ETFs) this month—described as “just the beginning” by one legendary Wall Street chief executive.

Now, analysts at Wall Street giant JPMorgan have predicted the outflows from Grayscale’s converted spot bitcoin ETF (GBTC) are “largely behind us,” signalling an end to the downward pressure on the bitcoin price (just after JMorgan’s chief executive Jamie Dimon proposed a wild Satoshi Nakamoto theory).

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“Given $4.3 billion has come out already from GBTC, we conclude that GBTC profit taking has largely happened already,” the JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note seen by Coindesk, dwarfing the researchers’ earlier estimate that $3 billion could leave GBTC.

“This would imply that most of the downward pressure on bitcoin from that channel should be largely behind us,” the analysts added.

The bitcoin price has crashed by around 20% since 11 U.S. spot bitcoin ETFs began trading earlier this month, the culmination of a decade-long campaign to bring a fully-fledged bitcoin fund to market.

The flow of funds from Grayscale’s GBTC has partly gone into rival spot bitcoin ETFs as investors are attracted by lower fees.

“There appear to be two emerging competitors to Grayscale’s bitcoin ETF: Blackrock and Fidelity, which have so far attracted $1.9 billion and $1.8 billion of inflows respectively. They both have much lower fees of only 25 basis points (without waivers) vs 150 basis points for GBTC,” JPMorgan’s analysts wrote, adding if Grayscale doesn’t make its fees more competitive the out flows could accelerate and “reach critical mass.”

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The rotation of funds from Grayscale into BlackRock and Fidelity’s bitcoin ETFs has suggested what had been seen as a landmark launch of the U.S. spot bitcoin ETFs has failed to trigger a “flood” of new crash into the crypto market.

“Bitcoin has now fallen 17% from its bitcoin ETF-driven high earlier this month,” Danni Hewson, head of financial analysis at AJ Bell, said in emailed comments.

“Investors thought the launch of bitcoin ETFs would create a new pool of buyers and drive the cryptocurrency higher. However, there are now suggestions that it’s merely caused some people to shift money out of certain bitcoin providers and into the ETF vehicles, so a transfer of wealth and not a flood of new cash.”

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