The release of GBTC stock could increase selling pressure and push the BTC price further south to $ 25.000, according to analysts at JPMorgan.
Although bitcoin has recovered several thousand dollars after the mid-week slump, JPMorgan strategists still predict a bearish future for the asset. In their latest performance reminder, they touched upon the upcoming release of GBTC stock, which could bring the cryptocurrency up to $ 25.000.
GBTC shares to play a crucial role
Led by Nikolaos Panigirtzoglou, analysts at the giant multinational investment bank have shown a controversial approach to the primary cryptocurrency. They've gone from predicting a six-figure price tag to defining multiple doomsday scenarios.
One thing they have been consistent with is the role of the largest cryptocurrency asset manager: GrayScale. Earlier this year, they warned that BTC's price could undergo a correction as inflows to the Grayscale Bitcoin Trust had declined.
In the latest memo reported by Bloomberg, they faced another bearish scenario involving BTC's largest monitoring fund. This time, they touched on unlocking GBTC shares.
As previously reported on these pages, institutional investors using Grayscale's services will receive access to 16.000 bitcoins in a single day in July. The rest of the month will also see substantial amounts unlocked.
After this six month freeze period and bearing in mind the appreciation of BTC's value over this time frame, it is safe to assume that at least some of the investors will decide to cash out. This, according to JPM, could lead to greater volatility and could bring selling pressure to the market.
Stack Funds also spoke of a similar possibility recently, but their article argued that bitcoin may have already hit rock bottom.
$ 25.000 on the map for BTC?
Just a few days ago, bitcoin fell to its lowest price in nearly six months, below $ 29.000. It has since recovered and is currently above $ 32.000, but JPM analysts still see more negative price movements on the horizon.
“Despite this week's correction, we are reluctant to abandon our negative outlook for Bitcoin and the cryptocurrency markets more broadly. Despite some improvements, our signals remain bearish overall ”. - they said.
Furthermore, they believe that the price of BTC is close to overvaluation, which is evident from the comparison between its volatility and gold. As such, they noted that "it would still take a price drop to the $ 25.000 level before long-term momentum signals capitulation."
And what do you think of the JPM analyst reports? Are you also bearish or more optimistic? Let us know in the comments below what you think.