JPMorgan Analysts Doubt Bitcoin’s Future, Blame Retail and Speculators 🐻📉

JPMorgan Analysts Predict Bleak Outlook for Bitcoin in the Short Term. Is the Asset's Surge Driven by Retail and Speculative Investors?

JPMorgan says speculators and retail investors are behind the recent Bitcoin surge.

By Andrew Throuvalas
Last updated: March 14, 2024 18:50 EDT | 1 min read

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JPMorgan analysts have boldly expressed their skepticism regarding Bitcoin’s near-term future, asserting that the current rally is primarily fueled by retail investors and speculative institutions. According to the bank, both groups have recently joined the ranks of momentum traders and commodity trading advisors in pouring funds into gold and Bitcoin futures.

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JPMorgan’s Bitcoin Analysis 📊🔍

Contrary to the popular belief that the surging success of Bitcoin spot ETFs has resulted in outflows from gold ETFs, JPMorgan offers a different perspective. The bank’s analysts suggest that investors are actually shifting funds from gold ETFs to physical gold in the form of bars and coins. Since the beginning of the year, over $5 billion has flowed out of gold ETFs, while almost $12 billion has flowed into Bitcoin ETFs.

According to Nikolaos Panigirtzoglou and his team, who led the analysis, “This [gold ETF] outflow trend does not reflect an aversion to gold by private investors such as individuals and family offices, but rather an instrument shift away from physical gold ETFs to bars and coins.”

Bitcoin and gold have often been compared due to their shared characteristics as limited-supply commodities and potential hedges against inflation or financial crises. Bitcoin supporters assert that the cryptocurrency surpasses gold in terms of monetary properties such as scarcity and portability, and predict that a day will come when Bitcoin “eats” gold. However, JPMorgan’s analysts argue that gold ETF buyers are merely seeking the security provided by physical gold.

“These days, privacy and tangibility have become more important considerations for private investors since the pandemic, and physical gold ETFs have a disadvantage in this respect relative to holding bars and coins,” states JPMorgan’s report. The bank further adds that the demand for physical gold has surpassed that of ETF gold since the onset of the pandemic, even outstripping gold purchases by central banks.

What Are The Real ETF Inflows? 💰🔄

While Bitcoin ETFs have seemingly enjoyed tremendous success, JPMorgan posits that they are facing the opposite scenario compared to gold. The bank suggests that holders of actual Bitcoin on crypto exchanges are selling their holdings to purchase the ETFs instead. This theory is supported by data indicating that approximately $7 billion has flowed out of crypto exchanges since the launch of Bitcoin ETFs.

“In other words, the net flow from retail investors into the newly created ETFs is more likely to be around $2 billion,” the analysts claim.

Despite MicroStrategy’s ongoing efforts to raise funds for buying Bitcoin, JPMorgan believes that this perpetuates the already overhyped market and may potentially lead to a major correction.

Q&A: Addressing Your Concerns and Answering Your Questions ❓✅

Q: Why do JPMorgan analysts doubt Bitcoin’s future?

A: JPMorgan analysts express doubt about Bitcoin’s future due to its current rally being driven by retail investors and speculative institutions, rather than more sustainable factors.

Q: How are Bitcoin and gold related?

A: Bitcoin and gold are often compared due to their shared characteristics as limited-supply commodities and potential hedges against inflation or financial crises.

Q: Why are investors shifting funds from gold ETFs to physical gold?

A: JPMorgan suggests that investors are shifting funds to physical gold for reasons such as privacy and tangibility, which have become more significant considerations since the onset of the pandemic.

Q: What are the real ETF inflows for Bitcoin?

A: JPMorgan believes that holders of actual Bitcoin on crypto exchanges are selling their holdings to purchase Bitcoin ETFs, resulting in outflows of approximately $7 billion from exchanges.

Future Outlook and Conclusion 🚀🔮

The analysis offered by JPMorgan provides an alternative perspective on Bitcoin’s surge. While the bank remains skeptical about the future of Bitcoin, it is important to consider multiple viewpoints when making investment decisions.

For those interested in Bitcoin, it is crucial to closely monitor the market dynamics and consider both the positive and negative factors. The ongoing popularity of Bitcoin ETFs may create short-term opportunities, but it is essential to be mindful of the potential for market corrections as well.

As the cryptocurrency market continues to evolve, it is important for investors to stay informed and adapt their strategies accordingly. Only time will tell how the relationship between Bitcoin and gold unfolds in the long run.

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Disclaimer: This article does not constitute financial advice. Always conduct your own research and consult with a professional before making any investment decisions.

📚 Reference List: – Bitcoin Not Taking Off as Mainstream Payment, Says BOE Governor – Bitcoin ETFs Trigger Massive Miner Outflows, $1 Billion Moved to Exchanges – Crypto Use for Money Laundering Far Below Cash, Says US Treasury

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