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The future of the crypto market is sparking numerous speculations. The latest one comes from JPMorgan, which predicts a significant recovery starting in August. This forecast comes after a major reassessment of the net flow of cryptocurrencies since the beginning of the year, influenced by notable bitcoin liquidations.
JPMorgan’s New Figures on Cryptocurrency Flows
JPMorgan recently adjusted its estimate of the net flow of cryptocurrencies from $12 billion to $8 billion for the year 2024. This revision takes into account various factors, including significant bitcoin liquidations. The bank’s analysts, led by Nikolaos Panigirtzoglou, highlighted that this reduction is mainly due to a decrease in bitcoin reserves on exchanges over the past month. “Bitcoin liquidations by Mt. Gox creditors and sales of seized assets by the German government have contributed to this decline,” they pointed out.
The analysts noted a substantial decrease in the German government’s bitcoin reserves, which dropped from 13,110 BTC to 9,925 BTC in one day. At the same time, the Mt. Gox rehabilitation trustee started repayments in bitcoin to creditors, marking a key step after the massive 2014 hack.
The revised estimate includes $14 billion in net flows into crypto funds, $5 billion from Chicago Mercantile Exchange (CME) futures contracts, and $5.7 billion from crypto venture capital funds.
Prospects for the Crypto Market
According to JPMorgan, this revision of net flows could stabilize the market. “This revision of estimates should help stabilize the market as exchange reserves decline,” the analysts specified.
JPMorgan considered the initial forecasts of $12 billion to be too optimistic, given the high value of bitcoin relative to its production cost and the price of gold. In June, the bank had expressed doubts about the sustainability of such inflows into the crypto industry, questioning the robustness of these projections.
If JPMorgan’s prediction proves accurate, it could mark a turning point for the crypto market. Stabilization and recovery starting in August could attract new investors and restore confidence among market participants. However, analysts remain cautious. Factors such as government regulations and technological developments will continue to play a crucial role in the evolution of the crypto market, they noted.
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Graduated from Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I committed to raising awareness and informing the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. Every day, I strive to provide an objective analysis of the news, decipher market trends, relay the latest technological innovations, and put the economic and societal issues of this ongoing revolution into perspective.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.