JPMorgan Questions The Sustainability Of Crypto Inflows After $12 Billion Floods In So Far This Year

Updated: 14 June 2024

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JPMorgan has questioned whether the pace of inflows into the crypto market this year can be maintained.

So far in 2024, $12 billion has flooded into the crypto market, the majority into spot Bitcoin ETFs (exchange-traded funds), JPMorgan analysts led by Nikolaos Panigirtzoglou said in a Jun. 12 report.

“Given how high bitcoin prices are relative to its production cost or relative to gold, we are skeptical that the YTD pace of $12bn will continue into the remainder of the year,” the analysts said.

JPMorgan Says Much Of The Inflows Not New Money

Since spot Bitcoin ETFs launched at the start of the year, around $16 billion has entered these investment products.

ETF inflows combined with CME futures and funds raised by crypto venture capital funds pushed the year-to-date inflows to $25 billion. But the JPMorgan analysts say the majority of this capital is not new money entering the digital asset sector.

“We believe there has likely been a significant rotation away from digital wallets on exchanges to the new spot bitcoin ETFs,” the analysts said. This is evident in the decrease in exchanges’ BTC reserves

Since spot Bitcoin ETFs started trading, about 220k BTC coins worth around $13 billion have left exchange platforms.

Analysts Still Bullish On BTC Despite Weekly Drop

Bitcoin suffered a minor loss over the past 24 hours to trade at $66,846.29 as of 6:05 a.m. EST. This latest drop pushed the leading crypto down 6% over the past 7 days.

#Bitcoin is still trading inside this major inversed head & shoulders pattern — right below all-time highs.

Push above $70,000 again, and there will be no stopping it. pic.twitter.com/vu3ohn5zLQ

— Jelle (@CryptoJelleNL) June 14, 2024

Despite the correction, some analysts are still very bullish on the crypto. Pseudonymous analyst Jelle told his 86.4k followers on X in a Jun. 14 post that BTC is still trading inside of a “major inverted head and shoulders pattern.”

If BTC is able to break above $70k, “there will be no stopping it,” he added in the post. Apollo co-founder Thomas Fahrer shares a similar sentiment, and said that the recent correction is just “noise.”