Bitcoin Forum

Bitcoin Bear Market Is Scaring Off Institutional Investors, Claims JPMorgan

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Institutional investors are being scared off by the protracted crypto bear market. That’s the assessment of a team of JPMorgan Chase & Co. analysts, including global market strategist Nikolaos Panigirtzoglou.

“Participation by financial institutions in Bitcoin trading appears to be fading,” the JPMorgan team wrote in a December 14 research note.

    “Key flow metrics have downshifted dramatically.”

Panigirtzoglou says crypto trading volumes have plummeted, as has interest in bitcoin futures. This has spawned a crushing fallout across the entire market, he observed.


JPM: Altcoins Are Getting Crushed
“Other cryptocurrencies continue to suffer disproportionately during this correction phase,” according to the JPM note.

Moreover, JPMorgan says the Crypto Winter has caused mass attrition among unprofitable miners as the hashrate has continued to unravel during the past few months.

    “This suggests that prices have declined to a point where mining is becoming uneconomical for some miners, who have responded by turning their mining rigs off,”

Meanwhile, market insiders say a myopic focus on mining costs makes analysts lose sight of the big picture.

Barry Silbert, the founder of crypto investment fund Digital Currency Group, said mining costs are not the proper benchmark with which to value the asset class.

    “You have to separate the investment decision that a miner is making from the operating cost for them to mine the bitcoin,”

Reference: https://www.ccn.com/bitcoin-bear-market-is-scaring-off-institutional-investors-claims-jpmorgan/

Isn't JP Morgan's CEO, Jamie Dimon, a known hater of crytocurrencies especially Bitcoin? I won't be surprised if they'll be creating headlines saying "I told you so" to us supporters. This is only news telling us that they were "right" on saying Bitcoin is really not that good of an investment. Supposed to say they are right that institutional investors are declining in the market all I can say is that it is normal as these investors are not looking to pool their money on a losing market they don't want to go long as they are looking for markets where they can make the quickest bucks from their capital. So I don't really get why JP morgan is giving a statement that has already existed in other losing markets.

I remember having read an article about one of the funds they manage in Europe was one of the largest buyers of Bitcoin after that statement. Not sure whether or not it's true, but it wouldn't surprise me at all.

Overall, he knows how powerful the statements are coming from the CEO of one of the most powerful banks in the world. It's solely him abusing the power that was given to him.

It's another thing that people here are stupid enough to sell when Jamie Dimon coughs. I remember that there was a minor ~10% decline afterwards. We'll see him try to exploit his position more frequently as long as people keep selling.

This is silly, bear market is the time when you buy for the next bull run to maximize your profits. Those who have bought near the bottom of 2013 crash and sold at the recent ATH have made nearly a 100x returns (if such people do exist). Investors should use their own brains instead of parroting hot public opinions that Bitcoin goes to zero or Bitcoin goes to the moon. Why buy during the next bull run at $7,000 or higher if you can buy today for just $3,500?

That's probably not what's going on. JP Morgan also released a report a year ago (https://www.telegraph.co.uk/business/2017/12/04/bitcoin-could-new-gold-says-jp-morgan/) claiming that Bitcoin could emerge as a traditional, reliable asset class like gold. That's a pretty glowing endorsement. In fact, that report was done by Nikolaos Panigirtzoglou, one of the analysts cited in the OP.


That makes sense given the state of the market. The past several months obviously wasn't a time for accumulation by trading institutions. Money continues to flow out from the market. I imagine interest -- both retail and institutional -- will eventually return after the market turns around, just like we saw in 2015.

Exactly. Institutions know how to play a market, and they know that these are the times you should be loading up on coins. Retail "investors" aka gamblers mostly buy at the wrong time, and sell at the wrong time, and they have been selling like mad in the last couple of weeks, and they'll regret having done so for sure.

Buy when there's blood on the street and sell when idiots are celebrating prices reaching all time highs. Every Bitcoiner or smart investor has seen its BTC holdings significantly increase on the way down this year. If not, you haven't been paying attention to how cyclic this market is.

The cycles we're going through aren't necessarily helping to have a fairer distribution in wealth, but we aren't in a position to expect anything like that to happen with how stupid the mass is. Smart money will always have that advantage.

What I've seen is quite the opposite. Throughout the whole year there has been continued reports of institutions that are stepping into crypto, whether through trying to launch their own crypto investment fund, or opening trading services.

This might have slowed down in recent times due to the continued bearishness, but I don't think that it is necessarily "scaring off" institutional investors. I'm also sure that there are institutions right now that are looking at this bear market as a great buying opportunity.

There are still plenty of corporations that are flowing into the bitcoin markets during this bearish period. It's just that when the market has a bearish sentiment, people tend to not react to these kinds of positive news that they would otherwise have reacted to in a bull market. But that's just how the market cycle works.

so jp morgan says institutional investors are leaving the market. but this report (https://bitcoinist.com/bitcoin-otc-trading-volume-accumulating/) says OTC volume is ramping up and institutional investors are quietly accumulating. which one is it? ;)