JPMorgan Says Grayscale Share Sales Extra Headwind for Bitcoin
JPMorgan Says Grayscale Share Sales Extra Headwind for Bitcoin
(Bloomberg) --
Anticipated selling of shares in a major Bitcoin fund between June and July will likely become a fresh source of pressure on the world’s top cryptocurrency, according to JPMorgan Chase & Co.
While weak flows and price dynamics resulting from last month’s selloff fueled Bitcoin’s recent declines, possible sales of shares in the Grayscale Bitcoin Trust upon the expiry of a six-month lockup period could be an additional headwind, JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note Wednesday.
Bitcoin has remained under pressure in recent days, falling briefly below the key $30,000 level Tuesday, amid persistent concerns about its energy use and China’s expanded crackdown on the digital currency. It dropped 1.1% at $32,709 at 1:27 p.m. Hong Kong time on Thursday, down about 50% from its record high near $65,000 in mid-April.
“Despite this week’s correction we are reluctant to abandon our negative outlook for Bitcoin and crypto markets more generally,” JPMorgan’s strategists said. “Despite some improvement, our signals remain overall bearish.”
![JPMorgan Says Grayscale Share Sales Extra Headwind for Bitcoin](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ifiKaAxP_Jms/v2/560x-1.png)
Separately, DoubleLine Capital LP Chief Executive Officer Jeffrey Gundlach said on Twitter Thursday that “it’s a big deal” if Bitcoin closes below $30,000, without elaborating. The ability to hold on to that level is thought by some to be key to the cryptocurrency’s future trends.
Bitcoin’s fair value, based on a comparison of its volatility versus gold, is seen in a range of $23,000 to $35,000 in the medium term, JPMorgan’s strategists wrote. “It would still take price declines to the $25,000 level before longer-term momentum would signal capitulation,” they said.
©2021 Bloomberg L.P.