TL;DR Breakdown:
- Grayscale inflows are sustaining Bitcoin from facing a correction, says the United States JPMorgan.
- Thus, a drop in GBTC inflow could trigger a sudden decline in BTC price.
There has been fear among Bitcoin (BTC) investors that the cryptocurrency will face massive correction, just as the price has risen significantly over the past days. Perhaps, this fear of BTC correction has caused many people to sell-off their holdings since the cryptocurrency reached the 22k-$24k level, per Santiment. However, JPMorgan suggested in a recent report that a drastic price correction in BTC is unlikely at the moment – thanks to Grayscale inflows.
Grayscale inflows uphold BTC price
As the strategists at the United States bank explained, the odds of Bitcoin price correction is slim following the massive inflow of funds into Grayscale’s digital currency products, especially the Bitcoin Trust product. According to Nikolaos Panigirtzoglou, a strategist at JPMorgan, about $1 billion flows into the Grayscale Bitcoin product on a monthly basis. This explains the significant increase in GBTC valuation at over $13 billion.
On this note, the US bank noted that a decrease in Grayscale inflows would likely bring a sudden correction in Bitcoin price, which is similar to the record in H2 last year. “While it’s hard to avoid describing Bitcoin as “overbought,” the flows into the trust “are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics,” Panigirtzoglou added in the report.
Bitcoin still in price discovery
After breaking the $20,000 level last week, the price momentum of the crypto looked even stronger. It surged further to another all-time high record above $24,000, according to Coinmarketcap. In the $20k level, there was also massive accumulation seen with addresses holding at least 1,000 Bitcoin, as their number has been on the rise.
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