JPMorgan Cryptocurrency Sees Net Inflow of 12 Billion This Year Bitcoins Overvalued Price Will Be Unsustainable

According to The Block, JPMorgan analysts are skeptical about the sustainability of the strong inflow of cryptocurrencies this year, citing the current high price of Bitcoin.

Cryptocurrency net inflows amount to $12 billion so far this year
High Bitcoin prices may make inflows unsustainable
In its latest report, JPMorgan pointed out that the cryptocurrency market has seen a significant inflow of funds driven by Bitcoin spot exchange-traded funds (ETFs) so far this year, totaling $16 billion. When combined with the funds from CME futures and cryptocurrency venture capital, the total inflow of cryptocurrencies 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 cryptocurrency wallets to Bitcoin spot ETFs. Analysts cited data from CryptoQuant, stating 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 skeptical about whether this growth rate can be sustained:
Given that the price of Bitcoin is relatively high compared to its production costs or compared to the price of gold, we are skeptical whether the $12 billion growth from the beginning of the year can continue 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 was $66,500 at the time of writing.

JPMorgan
Bitcoin