JPMorgan's latest research report indicates a projected slowdown in crypto liquidations this month, with expectations of a market rebound starting next month.
The world’s largest private bank has revised its year-to-date estimate for net crypto flows down to $8 billion from the previous forecast of $12 billion.
This adjustment reflects concerns over Bitcoin’s valuation compared to production costs and gold prices, casting doubt on sustaining the earlier projected flow for the remainder of the year.
The decrease in estimated net flows primarily stems from a recent decline in Bitcoin reserves held across exchanges, according to analysts led by Nikolaos Panigirtzoglou.
This reduction in reserves is likely linked to Bitcoin sell-offs by creditors of Gemini and the defunct crypto exchange Mt. Gox, as well as sales by the German government liquidating seized crypto assets from criminal activities.
JPMorgan’s updated estimate of $8 billion encompasses $14 billion flowing into crypto funds by July 9, $5 billion from Chicago Mercantile Exchange (CME) futures flows, and $5.7 billion raised by crypto venture capital funds year-to-date.
Bitcoin (BTC) has struggled to recover after a sharp decline below $50,000 in early August, amid a downturn in global markets.
Recent on-chain data reveals that about 75% of all Bitcoin in circulation has stayed untouched for over six months.
Bitcoin’s recent attempt to surpass $60,000 was met with strong resistance, resulting in a 2.6% drop to $58,450.
In a notable development, Wintermute, a major player in the crypto market, has sold off nearly its entire stash of Wrapped Bitcoin (WBTC) on Binance, as revealed by on-chain data.