JPMorgan: Bitcoin’s Rally Tied To Institutional Demand

Sahana Kiran
Source – Unsplash

In the realm of cryptocurrency, the growing optimism surrounding the approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) is becoming increasingly evident. JPMorgan’s recent research report about Bitcoin highlights this positive sentiment. However, it captured the attention of the cryptocurrency community, with significant potential implications stemming from this impending approval.

This heightened enthusiasm regarding the ETF’s green light is not merely speculative. It finds substantial support in Bitcoin’s exceptional performance compared to other digital assets. This trend has gained momentum in recent times.

JPMorgan’s Bitcoin research report underscores the notion that the recent upswing in the king coin’s value is, in large part, driven by institutional involvement. This shift marks a departure from the retail investor-driven rallies observed in previous quarters. The evidence for this shift is clear in their analysis of the crypto futures market. Specifically, the equivalent futures position proxy for CME Bitcoin futures. This is predominantly utilized by institutional investors and has surged in the past week. This surge has propelled it not only to the highest level this year but also to levels last witnessed in August 2022, just before the FTX exchange collapse.

In stark contrast, the equivalent futures position proxy for CME Ether (ETH) futures remains relatively subdued. This further emphasizes the distinct appeal of Bitcoin to institutional investors.

The participation of institutions in the recent Bitcoin rally is further substantiated by an analysis of Bitcoin flows. The report points out a significant influx of BTC into larger wallets, a hallmark of institutional investor demand. This contrasts with previous periods when the Bitcoin market was primarily influenced by smaller wallets and retail investors.

Also Read: Bitcoin To Surge by 74% With Spot ETF Debut: Galaxy Digital Predicts

Bitcoin’s dominance rises to over 50%

Another noteworthy development in the cryptocurrency market is Bitcoin’s resurgence in terms of market dominance. Currently, Bitcoin’s market dominance stands at 54%, its highest point in the last 30 months. This statistic signifies the cryptocurrency’s robust position, particularly as it anticipates the forthcoming Bitcoin halving event scheduled for April 2024.

Traditionally, the month of October has been regarded as a bullish period for cryptocurrencies, often dubbed “Uptober.” This trend is clearly evident in Bitcoin’s impressive performance over the past few weeks. This is as it surged from just below $27,000 at the start of October to achieve a new yearly high of $35,000.

Additionally, the Crypto Fear and Greed Index, a widely observed sentiment indicator, has reached levels last seen in November 2021. This was when Bitcoin reached its all-time high of over $69,000. The index currently sits at 71, indicating a prevailing sense of greed among market participants. It also aligns with the view that the bear market is behind us.


Also Read: Bitcoin To Reclaim ATH Only by Q3 of 2024, Veteran Analyst Claims

In conclusion, Bitcoin’s remarkable performance is gaining substantial attention, largely driven by institutional interest and the optimistic outlook for a Bitcoin ETF. As Bitcoin continues to demonstrate its strength and resilience, the cryptocurrency community eagerly anticipates how these factors will shape the future of digital assets.