Bitcoin
Why JPMorgan Sees Bitcoin Rebound in August – DL News
- JPMorgan sees Bitcoin recovery in August.
- Liquidations from Mt. Gox, the German government and Gemini creditors will soon subside, the investment bank said.
- JPMorgan estimated that the cryptocurrency sector has seen just $8 billion in inflows this year so far.
Bitcoin has fallen 20% in the past 30 days, but financial giant JPMorgan doesn’t expect the decline to last long.
“We continue to look for a crypto market recovery from August onwards,” JPMorgan analysts said in their latest Flows and Liquidity report, released on Wednesday.
The analyst group, led by managing director Nikolaos Panigirtzoglou, attributed Bitcoin’s performance to heavy selling by Gemini creditors and the German government, as well as fears stemming from Mt. Gox creditors receiving their own repayments soon.
Gemini Cryptocurrency Exchange credited $940 million to distressed Gemini Earn customers in May. Earn customers saw their funds tied up in 2022 when crypto lending firm Genesis, a partner in the program, filed for bankruptcy in January 2023.
But Gemini achieved a 100% recovery rate and paid its customers in the same currency, meaning that customers who lent one Bitcoin to Earn received one Bitcoin back.
Meanwhile, the German government liquidated 32,000 Bitcoin, worth $1.9 billion, have been on the open market in the past three weeks, according to market maker Wintermute. There are now less than $900 million left to sell.
Collapsed cryptocurrency exchange Mt. Gox will finally distribute 142,000 Bitcoins to creditors soon. It’s a colossal amount, but there are reasons to believe creditors will not try to redeem the $8.2 billion all at once.
“These sell-offs will subside after July,” JPMorgan said, which is why the firm expects a recovery later.
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JPMorgan also estimated that digital assets have seen $8 billion in inflows this year so far — a 33% decrease from its mid-June estimate of $12 billion in inflows.
In comparison, cryptocurrencies saw around $15 billion in inflows in 2023, $40 billion in 2022 and $45 billion in 2021.
The calculations were based on net inflows into cryptocurrency funds, flows into CME cryptocurrency futures contracts and fundraising by cryptocurrency venture capital funds.
Capital rotation from cryptocurrency exchanges to other funds was also taken into account.
Tom Carreras is a markets correspondent for DL News. Got a Bitcoin tip? Contact him at tcarreras@dlnews.com