JPMorgan believes Grayscale holds the key to Bitcoin retesting the $40,000 mark over the coming days and weeks
JPMorgan strategists recognise that Bitcoin is currently struggling and believe Grayscale holds the key to the cryptocurrency reaching $40,000 again. Bitcoin has struggled to reach the $40,000 mark since it set a new all-time high of $41,900 at the start of the year.
Its price underwent a 30% correction last week, dropping to $32,000 before rebounding and is currently trading above $36,000 per coin. With its recent struggles, JPMorgan strategists think that Bitcoin’s short-term performance depends on Grayscale.
The lead strategist Nikolas Panigirtzoglou said that the leading cryptocurrency could lose its lustre over the short-term unless it surpasses the $40,000 mark. BTC broke that deadlock twice this month, when it rallied to $41,900 and when it topped $40,000 last week.
JPMorgan strategists believe that Grayscale, with over $23 billion in assets under management, holds the key to determining whether Bitcoin returns to the $40,000 position or not.
The JPMorgan strategists wrote in a note on Friday that “the flow of funds into the Grayscale Bitcoin Trust would have to sustain its $100 million per day pace over the coming days and weeks for such a breakout to occur”.
Grayscale has become the largest cryptocurrency investment fund after amassing over $6 billion from investors last year. If Bitcoin doesn’t break the $40,000 psychological barrier again, then trend-following traders could spread last week’s correction, the strategists added.
This isn’t the first time Grayscale’s funds are coming to help push Bitcoin’s price higher. The strategists noted that Bitcoin was in a similar situation in November, with the cryptocurrency failing to surpass the $20,000 mark. They highlighted that the flows of institutional investment into the Grayscale trust aided the leading cryptocurrency to extend its rally.
Despite recent struggles, Bitcoin is in the midst of its best year in terms of price performance. The leading cryptocurrency began 2020 trading just above $7,000. However, it went up by over 500% within a year after it reached its current all-time high of $41,900 per coin.
Bitcoin could continue its rally well into the second half of 2021. Pantera Capital predicted Bitcoin is on track to reach $115,000 by August. It would need to rise by more than 300% from its current price, and the hedge fund believes the cryptocurrency will achieve it in the coming months.