JPMorgan Chase Cryptocurrency Inflows Reach 12 Billion This Year Bitcoins High Price May Not Sustain
According to The Block, JPMorgan analysts are skeptical about the sustainability of the strong inflow of cryptocurrencies so far this year, citing the current high price of Bitcoin.
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Net inflow of cryptocurrency funds so far this year is $12 billion
Bitcoin’s high price may make it difficult for the inflow of funds to continue
In its latest report, JPMorgan pointed out that so far this year, the cryptocurrency market has seen a significant inflow of funds driven by Bitcoin spot exchange-traded funds, totaling $16 billion. When combined with the funds from CME futures and cryptocurrency venture capital, the total inflow of cryptocurrency so far this year has reached $25 billion. However, JPMorgan believes that not all of this represents new funds entering the market.
Due to cost efficiency, liquidity, and regulatory advantages, many investors may have shifted from exchange crypto wallets to Bitcoin spot ETFs. Analysts cited data from CryptoQuant indicating that since the launch of ETFs in January, exchange Bitcoin reserves have decreased by 220,000 Bitcoins, or $13 billion, a significant shift. Adjusting for this data, the net inflow of cryptocurrency assets so far this year is approximately $12 billion.
Although at this rate, an estimated $26 billion in net inflows is expected by the end of the year, JPMorgan remains doubtful about whether this growth rate can be sustained:
Given that the price of Bitcoin is relatively high compared to its production cost or the price of gold, we are skeptical about whether the $12 billion growth rate from the beginning of the year can be sustained until the end of the year.
JPMorgan raised its estimate of Bitcoin production costs from $42,000 to $45,000 last month. The Bitcoin price at the time of writing was $66,500.
