JPMorgan Chase Analysts Claim Extended Crypto Bear Market Scaring Off Institutions
Experts from global investment bank JPMorgan Chase think that the drawn out crypto bear market is discouraging institutional investors.
This is according to a report from Bloomberg.
Analysts from JPMorgan and global market strategist Nikolaos Panigirtzoglou, have disclosed that involvement of institutional investors in Bitcoin (BTC) “appears to be fading.”
In a research note, analysts have determined “key flow metrics have downshifted dramatically,” including a dip in the Bitcoin futures market.
The experts noted the diminishing index of open interest (OI) — the amount of open contracts on Bitcoin futures — on the Chicago Board Options Exchange (CBOE) world markets. They also claimed that in the past month the index touched its “lowest levels” since the introduction of Bitcoin futures trading on December 10, 2017.
Pointing to data from the United States Commodity Futures Trading Commission (CFTC), the report claimed that the “more widely used” contracts by the Chicago Mercantile Exchange (CME) are “near the bottom of 2018’s range.” With that, the CME declared in mid-October that BTC futures had kept on developing in the third quarter this year.
In addition, JPMorgan said that the average transaction size in the crypto market has dipped to lower than $160, compared to about $5,000 a year ago. Additionally, analysts cited that altcoins are going to “suffer disproportionately during this correction phase.”
The research note also tackled the issue of the crash of crypto mining profitability that is linked with the overall malaise of crypto markets. Pointing to the dropping Bitcoin hashrate — the measure of mining’s computational difficulty — JPMorgan said that mining is no longer economical sound for a lot of miners, who are now being forced to sell off their equipment.
This is definitely an article which points to a particular mindset. The investor class of course is going to be down and out about something that it views as an investment. That's the problem with the corporate mentality when dealing with Bitcoin. They see it as a security in an opportunity to make money that's why they will not understand and will be skeptical about getting in at opportune moments. They can't go to a congressman or president and asked them to manipulate the Bitcoin market so their prices stabilize and they can feel safe to take an investment which has been arbitrarily weakened by governmental control. It's not some nefarious plot but simply the way things work in the manipulated Fiat system. So when you have something like cryptos that come a long that can't be manipulated trained investors begin thinking like newbie investors. They too will miss out on the greatest profitability of the adoption curve just like the average user because they don't see the forest for the trees.