JPMorgan Analysts Predict Short-Term Downturn in Crypto Market
JPMorgan analysts predict a potential short-term downturn in the crypto market, citing reduced institutional interest in Bitcoin and Ethereum futures contracts.
Key Points on Institutional Demand
- Total crypto market capitalization dropped by 15% from $3.72 trillion to $3.17 trillion within two months.
- Bitcoin and Ethereum futures are nearing a state of "backwardation," where futures prices fall below spot prices.
- This condition often indicates diminished interest from institutional investors in CME futures.
Factors Behind Declining Demand
- Institutional investors are taking profits, lacking immediate positive market catalysts.
- No significant crypto-related policy initiatives are anticipated until 2025.
- Momentum-driven funds are reducing exposure to Bitcoin and Ethereum, with some Ethereum metrics turning negative.
Retail Trading Trends
- A recent survey revealed that 71% of institutional traders do not plan to engage with crypto this year, although this is an improvement from 78% last year.
- Retail trading platforms like Robinhood reported a 16% surge in share value due to increased retail interest in cryptocurrencies and stocks.