JPMorgan maintains "cautious" stance on crypto markets in the short term
JPMorgan continues to advise caution in cryptocurrency markets in the near future due to several factors, including a lack of positive indicators and declining interest from retail investors.
"With a lack of positive catalysts, with retail momentum dissipating and with the three headwinds mentioned earlier in our post (elevated positioning, high bitcoin prices against gold and against the estimated cost of bitcoin production, moderate crypto financing VC) still in place, we maintain a cautious stance on crypto markets in the near term," JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a report on Thursday.
There has been "significant" selling or profit-taking in the cryptocurrency market over the past two weeks, with retail investors perhaps playing a larger role than institutional investors, according to analysts.
âIndeed, retail investors appear to have sold off crypto and equity assets during April,â the analysts said.
They added that not only did spot bitcoin exchange-traded funds experience outflows in April, but indicators of retail interest in stocks, such as net flows into stock funds, also declined over the past month.
"Net flow into equity funds turned negative in April after heavy buying in February and March," the analysts said.
