Bitcoin
Bitcoin Stabilizes, JPMorgan Sees Recovery in August
Main conclusions
- Bitcoin remains stuck in the $57,000 range. JPMorgan says bitcoin’s negative price trend will reverse in August.
- Analysts backed Iris Energy shares a day after they were dragged down by a short-seller report.
- US spot bitcoin ETFs are being bought this week.
Bitcoin price is stagnant.
Despite briefly gaining after better-than-expected consumer inflation data or Fed comments this week, it has recently returned to the range around $57,000. Analysts at JPMorgan say the cryptocurrency could overcome its price inertia in August.
Meanwhile, the leading cryptocurrency recently traded just above $58,000, up slightly over the past 24 hours.
Why is Bitcoin price stagnant?
It appears that demand and supply pressures are canceling each other out.
The German government has continued to sell bitcoin, although it is starting to scale back those sales. It still holds 3,846 bitcoins (worth about $222 million) on the blockchain; however, the European nation has transferred about $3 billion worth of the cryptocurrency since the beginning of June, according to data from Arkham Intelligence. Coinbase Germany managing director Jan Sell told DL News that the amount of bitcoin they sold as part of Germany’s liquidation process is not a large amount compared to normal volumes.
US Spot Bitcoin Exchange Traded Funds (ETFs) have been buying, with about $79 million flowing into the financial products on Thursday, according to Farside Investors. That brought the week’s flows to more than $737 million.
Downward pressure on bitcoin prices driven by recent news is almost over, JPMorgan analysts wrote, suggesting prices could rebound next month.
Bitcoin-related stocks in focus
MicroStrategy (MSTR) shares continued their upward trend a day after announcing a 10-for-1 stock splitrising about 5% in recent trading on Friday.
Shares of bitcoin mining company Iris Energy (IREN) rose 10% in early trading, with The Block reporting that Bernstein analysts came to its defense following a report from a short-seller. Iris shares fell 13% on Thursday after Culper Research said the company was worth much less than its current valuation.
Block Actions (square) rose nearly 3% after Bernstein analysts assessed the value of the company’s deal to supply mining hardware to Core Scientific (CORZ) at approximately $300 million. Core shares have recently risen more than 2%.
SEC willing to relax stance on cryptocurrency custody
On the regulatory front, the U.S. Securities and Exchange Commission (SEC) is poised to allow exceptions to its SAB 121 guidance, according to Bloomberg Law. The rule in question, which concerns the custody of crypto assets on behalf of customers, is seen as restrictive for traditional financial firms, and a change in the SEC’s stance could aid in the broader adoption of crypto assets.