Bitcoin enthusiasts who are considering a return above the $ 40.000 level have been concerned that demand for the largest fund that monitors digital currency remains limited, according to JPMorgan Chase & Co.
The $ 20 billion Grayscale Bitcoin Trust flow rate appears to have peaked on a four-week moving average, according to JPMorgan analysts led by Nikolaos Panigirtzoglou. The fund fell 22% in the last two weeks to January 22, surpassing the 17% drop in Bitcoin over the same period.
"Currently, the impetus for institutional flows behind the Grayscale Bitcoin Trust is not strong enough for Bitcoin to exceed $ 40.000," analysts said. They added that "the risk is that investors will continue to loosen Bitcoin futures".
Bitcoin's frantic rally has lost momentum as the biggest cryptocurrencies reached climax of $ 42.000 on January 8th. Proponents argue that the institutional interest help in strengthening it use of Bitcoin as a hedge against the weakness and inflation of the dollar, while skeptics support that the latest increase is yet another speculative bubble, similar to the fury of 2017 that led to the collapse of its price currency.
Bitcoin rose about 4% - to $ 33.225 - at London on Monday. The digital currency continues to record 270% gains in the last year, despite the fact that its price has fallen by about $ 10.000, since January.
Source of information: bloomberg.com