JPMorgan Predicts More Selloff for Grayscale's Bitcoin Fund

• JPMorgan Forecasts Further Selloff of Grayscale's Bitcoin Fund
• Bitcoin ETF Trade Volume Hits $9.7 Billion in Three Days
• Will Bitcoin's Price Suffer?
• Potential Price Drop and Subsequent Rebound

JPMorgan Forecasts Further Selloff of Grayscale's Bitcoin Fund

JPMorgan, a leading global financial institution, has forecasted that Grayscale's Bitcoin$42,260 -0.64% (BTC) fund, GBTC, may experience further selloffs in the near future. According to insights from the bank, the $3 billion inflow into spot BTC ETFs (Exchange Traded Funds) seems to indicate a shift from existing bitcoin investment channels. This may be attributed to retail investors transitioning from digital wallets, which are typically held with exchanges or retail brokers, to less expensive spot bitcoin ETFs.

Bitcoin ETF Trade Volume Hits $9.7 Billion in Three Days

Grayscale transformed its GBTC fund into a spot BTC ETF following the Securities and Exchange Commission's (SEC) landmark approval earlier in the month. JPMorgan analyst Nikolaos Panigirtzoglou pointed out that BTC's price dropped 10% subsequent to the launch of the spot BTC ETF. Panigirtzoglou suggests that this could be due to profit taking, a phenomena often characterized by buy the rumor/sell the fact dynamics. Since January 12, outflows from Grayscale's Bitcoin fund, GBTC, have exceeded $2 billion.

Will Bitcoin's Price Suffer?

Panigirtzoglou predicts that the outflows from Grayscale's GBTC fund might exert added downward pressure on bitcoin prices in the upcoming weeks. The analyst implies that, assuming the previous $3bn estimate is accurate, and considering that $1.5bn has already exited, there could potentially be a further $1.5bn set to depart the bitcoin space due to profit taking on GBTC.

Bitcoin's (BTC) price is already teetering on the edge of falling below $41,000. The price of the asset has declined 1.3% in the last 24 hours, 3.5% over the previous week, and 5.7% since December.

Potential Price Drop and Subsequent Rebound

CoinCodex, a cryptocurrency market platform, projects a bearish outlook for Bitcoin (BTC) in the coming weeks. The platform anticipates BTC's price could plummet to $36,182 by December 26, 2024. This projected drop signifies a decrease of nearly 12% from current levels. However, the platform predicts that BTC's price could rebound in the following month.

BTC is expected to go through its halving cycle in April, an event that is traditionally bullish. There is potential for the asset's price to regain its momentum in the weeks leading up to the halving.

Edited by Jonathan Stoker