After a less than encouraging start to the year for Bitcoin (BTC), financial giant JPMorgan unveiled an optimistic outlook for the cryptocurrency, anticipating “limited downside potential.”
The prediction comes at a time when the adoption of spot Bitcoin ETFs failed to generate the expected surge in the digital asset’s price at the start of the year, raising concerns among investors.
However, a recent research report from JPMorgan underlines a positive outlook, with a particular focus on the dynamics between the Grayscale Bitcoin Trust (GBTC) and other US spot Bitcoin ETFs.
In late 2023, the digital asset industry was buzzing with optimism about the arrival of spot Bitcoin ETFs, expected in the first week of 2024. These approvals were seen as a potential catalyst for the sector, but so far, a month after the start of new year, these expectations have not yet come true.
Despite this, several financial companies, including JPMorgan, remain hopeful about Bitcoin’s performance. The company has seen a 20% correction in the asset’s price over the past two weeks, attributing this to profit-taking on previous GBTC investments.
“Profit taking on GBTC’s ‘discount to NAV trading’ has been a big driver of Bitcoin’s correction”said JPMorgan. “To date, $4.3 billion has been withdrawn from GBTC since converting to an ETF.” The company also noted that most of this $4.3 billion outflow from GBTC reflects profit-taking and not a shift to cheaper spot Bitcoin ETFs.
Contrary to some expectations, JPMorgan predicts a significant change for Bitcoin as a whole. “We believe spot Bitcoin ETFs are likely to drive a significant change in Bitcoin market structure”the company said.
In summary, JPMorgan emphasizes that the limited downside potential for Bitcoin is mainly due to the changing reality of the asset. Profit making, investor redistribution and strategic product introduction are factors that characterize Bitcoin’s current situation. However, these factors should not hinder an overall positive outlook for the assets in the future.
claims JP Morgan $GBTC the sale is largely over. pic.twitter.com/DzRz4INYhW
— ◢ J◎e McCann 🧊 (@joemccann) January 25, 2024
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
