Anticipated selling of shares in a major Bitcoin fund between June and July will likely become a fresh source of pressure on the world’s top cryptocurrency, according to JPMorgan Chase & Co.
While weak flows and price dynamics resulting from last month’s selloff fueled Bitcoin’s recent declines, possible sales of shares in the Grayscale Bitcoin Trust upon the expiry of a six-month lockup period could be an additional headwind, JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note Wednesday.
Bitcoin has remained under pressure in recent days, falling briefly below the key $30,000 level Tuesday, amid persistent concerns about its energy use and China’s expanded crackdown on the digital currency. It dropped 1.1% at $32,709 at 1:27 p.m. Hong Kong time on Thursday, down about 50% from its record high near $65,000 in mid-April.
“Despite this week’s correction we are reluctant to abandon our negative outlook for Bitcoin and crypto markets more generally,” JPMorgan’s strategists said. “Despite some improvement, our signals remain overall bearish.”