Analysts at the investment bank JPMorgan predicted that the cost of Bitcoin could drop to $ 25 thousand. According to analysts, a decline in quotations could trigger a possible sale of shares of the Grayscale Bitcoin Trust after a six-month blocking period.
The Grayscale Bitcoin Trust functions similarly to ETFs in that it is secured and priced at Bitcoin. It is not registered with the US Securities and Exchange Commission (SEC), so only accredited investors have access to it. On June 23, it became known that ARK Invest Katie Wood invested in this fund.
As previously reported, institutional investors using GRAYSCALE services will be able to access 16,000 Bitcoins in July in just one day. A significant number of coins will also be unlocked during the rest of the month.
After this six-month blocking period, and given the rise in the value of BTC during this time period, it is safe to assume that at least some of the investors will decide to make money. This, according to JPM, could lead to increased volatility and could bring selling pressure on the market.
Stack Funds also recently talked about a similar opportunity. But their article argues that Bitcoin may have already hit its bottom.
The first cryptocurrency has remained under pressure in recent days. Briefly falling below the $ 30K level amid ongoing concerns over its energy use and China’s expanded crackdown on the digital currency. The expected sale of shares in the large Grayscale Bitcoin Trust from June to July is likely to be a new source of pressure on Bitcoin.
JPMorgan retains negative outlook for Bitcoin
JPMorgan noted that it maintains a negative outlook for Bitcoin despite the fact that its price returned to $ 31 thousand after falling to $ 28.8 thousand on June 22. Although some believe that the ability to hold at this level is the key to the future trends of cryptoassets. So, some analysts do not exclude the possible growth of Bitcoin. However, JPMorgan disagrees.
“Despite the rebound this week, we don’t want to abandon our negative outlook for the Bitcoin markets and cryptocurrencies in general. Despite some improvement, our signals generally remain bearish”, the bank explained.
According to analysts, in current conditions, the real value of the main cryptocurrency is in the range of $ 23-35 thousand.
Researchers analyzed the 21-day moving average of the Bitcoin futures and derivatives markets. They found “unusual developments reflecting weak demand for Bitcoin from institutional investors” trading BTC futures on the Chicago Mercantile Exchange (CME).
Another bearish signal is the decline in Bitcoin’s dominance in the cryptocurrency market. If in January the indicator exceeded 70%, then by the end of May the dominance dropped to 40%. At the moment, the dominance of Bitcoin is 44.12%.
According to JPMorgan experts, institutional investors are reluctant to buy failure Bitcoin. And therefore, in the short term, the rate of the first cryptocurrency may drop to $ 24,000.