The unlocking of GBTC shares could increase the selling pressure and drive BTC’s price further south to $25,000, predicted analysts from JPMorgan.
Although bitcoin recovered several thousand dollars after its mid-week crash, JPMorgan strategists still envision a bearish future for the asset. In their latest memo on its performance, they touched upon the upcoming unlocking of GBTC shares, which could drive the cryptocurrency down to $25,000.
GBTC Shares to Play a Crucial Role
Led by Nikolaos Panigirtzoglou, the analysts from the giant multinational investment bank have displayed a controversial approach to the primary cryptocurrency. They have gone from predicting a six-digit price tag to outlining multiple doomsday scenarios.
One thing that they have been consistent with is the role of the largest cryptocurrency asset manager – Grayscale. Earlier this year, they warned that BTC’s price might head for a correction as the inflows to the Grayscale Bitcoin Trust had declined.
In the latest memo reported by Bloomberg, they broached another bearish scenario involving the largest BTC-tracking fund. This time, they touched upon the unlocking GBTC shares.
As previously reported by CryptoPotato, institutional investors employing Grayscale’s services will receive access to 16,000 bitcoins in one day alone in July. The rest of the month will also see substantial quantities unlocked.
After this six-month locking period and keeping in mind BTC’s value appreciation in this time frame, it’s safe to assume that at least some of the investors will decide to cash in. This, according to JPM, could lead to enhanced volatility and could bring sell pressure to the market.
Stack Funds also spoke about a similar possibility recently, but their paper argued that bitcoin might have already reached its bottom.
$25K on the Map for BTC?
Just a few days ago, bitcoin dropped to its lowest price point in almost half a year, below $29,000. It has recovered some ground since then and currently stands above $32,000, but JPM’s analysts still see more adverse price movements on the horizon.
“Despite this week’s correction, we are reluctant to abandon our negative outlook for Bitcoin and crypto markets more generally. Despite some improvement, our signals remain overall bearish.” – they wrote.
Furthermore, they believe BTC’s price is close to being overvalued, which is evident from the comparison between its volatility versus gold. As such, they noted that “it would still take price declines to the $25,000 level before longer-term momentum would signal capitulation.”