JPMorgan says Flow to Grayscale Trust Key to Bitcoin Preview

Bitcoin’s correction odds would increase if flows to the world’s largest commercial cryptocurrency fund slowed significantly, according to strategists at JPMorgan Chase & Co.

The Grayscale Bitcoin Trust’s assets under management have climbed to $ 13.1 billion from $ 2 billion at the beginning of December last year, in the midst of a treble in the price of digital currency so far in 2020. The inflows to the fund are running at about $ 1 billion a month, the strategists led by Nikolaos Panigirtzoglou wrote in a note on Friday.

While it is difficult to avoid describing Bitcoin as “over-thinking,” the flows to the trust “are too large to allow any unflinching situation from momentum traders to generate ongoing negative price dynamics,” said the strategists. A major slowdown in those flows would boost the risk of a Bitcoin correction similar to the one in the second half of 2019, they said.