Although the recent sell-off in the cryptocurrency market has been negative, with Bitcoin falling more than 15% in a single month, financial giant JPMorgan Chase expects that this decline will not last long and is optimistic that the cryptocurrency market will resume its rise in August. potential.

Reasons why Bitcoin is falling

In a research report published on Wednesday, a JPMorgan analysis team headed by Nikolaos Panigirtzoglou said that Bitcoin’s recent weak performance is mainly due to “massive selling by Gemini creditors, the German government” and “market expectations that Mt. Gox creditors are about to receive compensation.” 's fear".

In May, cryptocurrency exchange Gemini repaid more than $2 billion in cryptocurrency to customers of its lending product Earn. The assets of these customers were frozen in 2022 due to the financial crisis of the cryptocurrency lending company Genesis. Since the value of Bitcoin has more than doubled during the period when the assets were frozen, industry experts expect that these customers will sell a certain amount of money after receiving compensation. Cryptocurrency.

According to data from Arkham Intelligence, the German government has sold more than 40,000 Bitcoins on the open market in the past three weeks, worth approximately US$2.33 billion, and currently has approximately US$520 million of Bitcoins left for sale.

At the same time, the bankrupt cryptocurrency exchange Mt. Gox is also repaying 142,000 Bitcoins to creditors. Although the amount is huge, there is reason to believe that creditors will not cash out the $8.2 billion in assets at once.

Sell-off expected to stop after July

JP Morgan analysts pointed out that "the selling wave will gradually stop after July" and "we continue to expect the cryptocurrency market to start a rebound in August."

In addition, JPMorgan Chase also estimates that the cryptocurrency market has realized adjusted net inflows of $8 billion so far this year, down 33% from the $12 billion estimated in mid-June.

In comparison, the cryptocurrency market received approximately $15 billion in net inflows in 2023; $40 billion in 2022; and $45 billion in 2021.

The report mentioned that the $8 billion in net inflows was calculated after calculating the strength of Bitcoin spot ETFs, CME futures inflows, and funds raised by cryptocurrency venture capital funds. In addition, the flow of funds from cryptocurrency exchanges to other funds has also been taken into account.

〈The Bitcoin sell-off is “nearly over”! JPMorgan Chase: Optimistic about the cryptocurrency market regaining momentum in August> This article was first published on "Blocker".