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Why JPMorgan Sees Bitcoin Rebound in August – DL News
- JPMorgan predicts Bitcoin rebound in August.
- Liquidations by creditors of Mt. Gox, the German government and Gemini will soon end, the investment bank said.
- JPMorgan estimates that the cryptocurrency sector has seen just $8 billion in inflows this year so far.
Bitcoin has fallen 20% in the past 30 days, but financial giant JPMorgan doesn’t expect the decline to last long.
“We continue to expect a rebound in the cryptocurrency market from August onwards,” JPMorgan analysts said in their latest Flows and Liquidity Report, released Wednesday.
The analyst group, led by CEO Nikolaos Panigirtzoglou, blamed Bitcoin’s performance on selloffs by Gemini creditors and the German government, as well as concerns that Mt. Gox creditors will soon receive their own repayments.
Gemini Cryptocurrency Exchange credited $940 million was paid to struggling Gemini Earn customers in May. Earn customers saw their funds frozen in 2022 when crypto lending firm Genesis, a partner in the program, declared bankruptcy in January 2023.
But Gemini managed to achieve a 100% recovery rate and repaid its customers in kind, meaning that customers who lent Earn one Bitcoin received one Bitcoin in return.
Meanwhile, the German government liquidated According to market maker Wintermute, 32,000 bitcoins, worth $1.9 billion, were on the open market in the past three weeks. He now has less than $900 million left to sell.
Bankrupt crypto exchange Mt. Gox will soon distribute 142,000 Bitcoins to its creditors. It’s a colossal sum, but there are reasons to believe Creditors will not try to recover the $8.2 billion in one go.
“These liquidations will ease after July,” JPMorgan said, which is why the firm expects a rebound later.
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JPMorgan also estimated that digital assets have received $8 billion in inflows this year so far, down 33% from its mid-June estimate of $12 billion in inflows.
In comparison, cryptocurrencies received around $15 billion in inflows in 2023, $40 billion in 2022 and $45 billion in 2021.
The calculations were made based on net inflows into crypto funds, flows into CME crypto futures contracts, and fundraisings by crypto venture capital funds.
The rotation of capital from crypto exchanges to other funds was also taken into account.
Tom Carreras is a markets correspondent for DL News. Got news about Bitcoin? Contact us at tcarreras@dlnews.com