Rally

Bitcoin ETF

Bitcoin

JPMorgan analysts have <a href="https://www.theblock.co/post/262324/jpmorgan-crypto-rally-looks-overdone" target="_blank" rel="noopener nofollow">cast</a> a skeptical eye over the recent crypto rally, indicating it may be built on sand rather than solid ground. Their latest report conveys a guarded stance, suggesting that the market’s exuberance may be outpacing the underlying fundamentals. 
As the market’s enthusiasm swells, fueled by pivotal developments such as the US Securities and Exchange Commission’s (SEC)&nbsp;potential green light of the&nbsp;spot Bitcoin exchange-traded fund (ETF), these financial experts are urging caution, advocating a<a href="https://www.newsbtc.com/bitcoin-news/bitcoin-on-the-brink-analyst-predicts-open-interest/" target="_blank" rel="noopener "> closer examination</a> of the elements at play. 
<h2 id="a-closer-look-at-etf-approval-and-regulatory-battles">A Closer Look At ETF Approval And Regulatory Battles</h2> 
Within the crypto sphere, JPMorgan analysts disclosed that two significant events have captured investor interest and driven <a href="https://www.newsbtc.com/news/crypto-forecast-analyst-predicts-santa-claus-squeeze/" target="_blank" rel="noopener ">prices upward</a>. 
These events include anticipating a US-approved spot Bitcoin ETF, which has ignited hopes of new capital inflows. At the same time, recent legal tussles involving the SEC have raised expectations for a more permissive regulatory environment. 
However, the JPMorgan team, led by analyst Nikolaos Panigirtzoglou, presents a contrarian view, deconstructing these drivers and their probable impact on the market. They argue that an ETF approval would usher in fresh capital, which might be misleading. 
The analysts propose that rather than attracting new investment; the approval could redirect existing funds from current Bitcoin investment products into the new ETFs. The JPMorgan team noted: 
<blockquote>
 First, instead of fresh capital entering the crypto industry to be invested in the newly-approved ETFs, we see as a more likely scenario existing capital shifting from existing bitcoin products such as the Grayscale bitcoin trust, bitcoin futures ETFs and publicly listed bitcoin mining companies, into the newly-approved spot bitcoin ETFs.
</blockquote> 
This shift, they assert, would not necessarily expand the <a href="https://www.newsbtc.com/altcoin/altcoins-at-turning-point-analyst-says-time-to-load-on-the-dips-its-a-different-sentiment/" target="_blank" rel="noopener ">market’s capital base</a>. JPMorgan’s team points to the tepid response to similar products in Canada and Europe as evidence, suggesting that a US spot Bitcoin ETF might encounter the same lukewarm reception. 
Legal victories against the SEC in high-profile cases like Ripple and Grayscale are also interpreted as potential precursors to a regulatory softening. Yet, the analysts remain unconvinced, citing the lingering aftereffects of the FTX scandal and the inherent risks of an under-regulated market. 
They further disclosed that these factors will likely keep the regulatory tightening trend intact, with little room for significant easing. 
<h2 id="bitcoin-halving-a-pre-priced-crypto-event">Bitcoin Halving: A Pre-Priced Crypto Event?</h2> 
The report delves into the much-discussed Bitcoin halving, which traditionally stokes bullish forecasts. However, JPMorgan’s analysts believe the market has already factored in the halving’s supply-squeeze implications. They noted: 
<blockquote>
 This argument seems unconvincing as the Bitcoin halving event and its effect are predictable and in our opinion are well factored into Bitcoin price.
</blockquote> 
They calculate that based on current data, the production cost of Bitcoin post-halving should double, particularly from the current $ $21,000 to $43,000. 
Their analysis concludes with a sobering outlook, anticipating a potential “buy the rumor, sell the fact” scenario post-ETF approval. Such a dynamic could see prices climb on anticipation and plummet once the event materializes, a pattern familiar to seasoned market observers. 
Echoing similar sentiments, financial commentator Peter Schiff has cast doubt on the longevity of <a href="https://www.newsbtc.com/bitcoin-news/bitcoin-price-tide-could-asic-miner-values-signal/" target="_blank" rel="noopener ">Bitcoin’s price</a> surges driven by ETF speculations. 
Schiff warns that post-approval, Bitcoin might face a shortage of positive triggers, potentially culminating in a market sell-off as the ‘buy the rumor, sell the news’ phenomenon unfolds. 
<blockquote class="twitter-tweet"> 
 How many times can <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw" rel="nofollow">#Bitcoin</a> rally on the same ETF rumor? Once a U.S. Bitcoin EFT is approved, or <a href="https://twitter.com/search?q=%24GBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="nofollow">$GBTC</a> is able to convert into an ETF, there will be no more “good” news for Bitcoin to rally on. After years of buying the rumor, everyone will finally be able to sell the news. 
 — Peter Schiff (@PeterSchiff) <a href="https://twitter.com/PeterSchiff/status/1713931894914515373?ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">October 16, 2023</a>
</blockquote> 
Meanwhile, Bitcoin has seen quite a <a href="https://www.newsbtc.com/bitcoin-news/bitcoin-grip-strengthens-record-highs-in-long-term/" target="_blank" rel="noopener ">significant move</a> in the past few hours. The asset has now marked a new high for 2023, surging above $37,000, up by nearly 10% in the past day. 
<img loading="lazy" decoding="async" src="https://www.tradingview.com/x/8IwzzgpH/" alt="BTC’s price chart on TradingView amid JPMorgan team crypto analysis" width="2770" height="1556"> 
Featured image from Unsplash, Chart from TardingView

Crypto’s Current Climb: JPMorgan Suggests Rally May Be Reaching Its Peak

Table of Contents

NewsBTC

Other articles published on Nov 9, 2023

Spain's CNMV Investigates Crypto Promotion Violations by Miolos S.L

Bitcoin, Solana, and Chainlink: Latest Price Analysis and Targets

Bitcoin Surges to Almost $37K, Triggering Over $140 Million in Liquidations

CoinSpot Nightmare: $2 Million Wallet Loss From Suspected Hack, Uncovered By ZachXBT

Cathie Wood’s ARK bags 1.1M Robinhood shares in one day

Preserving Indigenous Languages with AI: A Lifeline for Vulnerable Cultures

Join our free newsletter for daily crypto updates!