JPMorgan Predicts August Rebound For Bitcoin And Crypto Market

Investment banking giant JPMorgan has said that the cryptocurrency market is poised for a significant rebound starting August 2024.

In a recent research report, the bank suggested that crypto liquidations, which have been a cause for concern in recent months, are expected to decrease this month. This could pave the way for a market recovery.

However, the recent market recovery has made JPMorgan a bit more skeptical of the crypto market. For one, the bank has revised its year-to-date crypto net flow estimate from $12 billion to $8 billion.

In the report, the Wall Street firm expressed skepticism about the sustainability of the previous estimate, considering the high valuation of Bitcoin (BTC), relative to its production cost and the price of gold.

Bitcoin Reserves Across Exchanges Decline

Analysts at JPMorgan, led by Managing Director Nikolaos Panigirtzoglou, attribute the reduction in the estimated net flow to a decline in Bitcoin reserves across exchanges over the past month.

The decline is believed to be a result of various factors. Bitcoin liquidations by creditors of Gemini and the defunct crypto exchange Mt. Gox are contributing factors. Anticipated selling by the German government, which has been offloading seized crypto assets linked to criminal activities, is also a factor. 

JPMorgan warns of potential selling pressure in crypto markets in July from Mt. Gox creditors receiving 142K bitcoin, impacting market dynamics. Eyes on August for rebound amid looming uncertainties. #cryptocurrency #MtGox #JPMorgan

— Gagan Deep Singh (@0xGagan) July 3, 2024

The revised estimate of $8 billion net flow into crypto includes a $14 billion net flow into crypto funds by 9 July 2024 – $5 billion from Chicago Mercantile Exchange (CME) futures flows, and $5.7 billion raised by crypto venture capital funds year-to-date.

Read more: 12 Popular Ways to Buy Bitcoin with a Credit Card Instantly in 2024 

However, the estimate also includes a $17 billion adjustment to account for the rotation of funds from wallets on exchanges to new spot Bitcoin exchange-traded funds (ETFs).

Bitcoin Continues Recovery, Spot ETFs See 5th Day of Inflows

Bitcoin’s price has witnessed a rebound, surging to $57,152 from a weekly low of around $54,000. The leading cryptocurrency has seen a steady increase of over 3% in value over the past week.

The recovery aligns with the positive trend observed in US spot Bitcoin ETFs, which have recorded continuous net inflows for the fifth consecutive day. In fact, on Thursday, these ETFs registered a total daily net inflow of $78.93 million.

Among the spot Bitcoin ETFs, BlackRock’s IBIT, the largest in terms of net asset value, attracted the highest net inflows of the day, amounting to $72.09 million, as reported by SoSoValue data. The fund also boasted the highest trading volume on Wednesday, with $725.61 million.

Fidelity’s FBTC witnessed net inflows of $32.69 million. Other notable contributions to the positive inflow trend include Bitwise’s spot Bitcoin fund, which garnered $7.53 million, and ETFs from Ark Invest and 21Shares, which added $4.31 million.

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However, the inflow trend was offset by net outflows from Grayscale’s GBTC, which amounted to $37.69 million. Additionally, six other funds, including VanEck’s HODL, reported zero flows on the same day.

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.