JPMorgan Warns Bitcoin Could Fall Dragged Down by Market Overheating
Based on JPMorgan Bank’s analysts, the recent surge of Bitcoin in November is predicted to only be temporary, and those who believe in a long-term rally could be making a mistake.
Multiple signs indicate that the market is becoming overheated, driven by expectations of the introduction of Bitcoin exchange-traded funds (ETFs) in the US.
However, this trend may soon be replaced by a decrease in capital entering the digital currency. Once interest fades in this topic, traders will shift their focus to other types of investments.
Nikolaos Panigirtzoglou, a strategist at JPMorgan, stated that the capital currently staying in the cryptocurrency market is simply shifting between various instruments.
Therefore, the expectation for new investments, at least in the near future, should not be too high. Panigirtzoglou also pointed out that in Europe and Canada, spot Bitcoin ETFs are already accessible to investors.
However, this introduction has not resulted in a significant increase of institutional capital flow into the crypto market. Similarly, the inflow of funds into crypto funds in the US is expected to be low, according to JPMorgan.
