JPMorgan: $100 Million/Day Must Flow Into Grayscale Bitcoin Trust To Push BTC Above $40,000

JPMorgan analysts state that Bitcoin (BTC) can see a further downside if it fails to make a strong move upwards to $40,000. The analysts said that unless BTC registered a strong “break-out”, it can see consistent profit-booking at this stage. Nikolaos Panigirtzoglou, the lead strategist at JPMorgan said that they are currently keeping a close on demand for Bitcoin Futures as well as institutional inflows into the Grayscale Bitcoin Trust (GBTC).

The world’s largest cryptocurrency Bitcoin (BTC) continues to remain under downward pressure after moving past $41, 500 levels on January 10. Over the last week, BTC has tested support at $30,000 twice while pulling back partially. At press time, Bitcoin (BTC) is 3.76% down trading at $35,086 levels with a market cap of $650 billion.

However, as BTC continues to trade sideways, the Grayscale Bitcoin Trust (GBTC) has again resorted to buying heavily. Last week, Grayscale purchased 10,000 Bitcoins after raising a massive $700 million in its biggest single-day-raise in 2021.

1/15/2021 was also our largest single asset raise day, ever.

— Michael Sonnenshein (@Sonnenshein) January 16, 2021

Grayscale’s purchase of 10,000 cost the company around $300 million of fund infusion. Meaning it still has another $400 million in spare from the recently raised amount. In a note to clients last Friday, the JPMorgan analysts wrote:

“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout to occur”.

Grayscale has been on the Bitcoin buying spree since the start of December 2020 with the Grayscale Bitcoin Trust (GBTC) now holding $23 billion in assets under management. On the other hand, Bitcoin has rallied very fast in 2021 shooting 33% just in the first ten days of the year. Even at the current price, Bitcoin is still 15% positive year-to-date.

JPMorgan analysts said that if BTC fails to conquer $40,000 levels, Trend-following traders “could propagate the past week’s correction” and “momentum signals will naturally decay from here up till the end of March”.

Eric Balchunas, the senior ETF analyst at Bloomberg Intelligence called Grayscale the ARK of crypto.

The similarities are pretty amazing. I think both hung in relative oblivion for 3-4yrs, had like $2b 12mo ago ago and then boom, 10x increase. Both defy trends: ARK w stock picking and grayscale w very high fees and 20%+ premiums.

— Eric Balchunas (@EricBalchunas) January 16, 2021