Bitcoin’s Recent Outperformance Fueled by Institutional Demand, JPMorgan Says

There has been a significant bitcoin inflow into larger wallets, which suggests institutional investor demand, the report said.

AccessTimeIconOct 26, 2023 at 9:56 a.m. UTC
Updated Oct 26, 2023 at 3:07 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Optimism about the approval of a spot bitcoin (BTC) exchange-traded-fund (ETF) by the U.S. Securities and Exchange Commission (SEC) continues to grow, JPMorgan (JPM) said in a research report on Wednesday.

This optimism is reflected in bitcoin’s strong outperformance versus other digital assets, the report said, noting that the world’s largest cryptocurrency recently made a new high for the year.

“It looks like this latest flow impulse had institutional participation,” analysts led by Nikolaos Panigirtzoglou wrote.

The bank’s analysis of the crypto futures market supports this assertion.

“Our futures position proxy based on CME bitcoin futures, which tends to be used mostly by institutional investors, has spiked over the past week rising not only to the highest level for this year but also to levels last seen in August 2022 before the FTX collapse,” the analysts wrote, referring to the Chicago Mercantile Exchange.

JPMorgan says the equivalent futures position proxy for CME ether (ETH) futures remains subdued.

Institutional participation in the recent rally is also reflected in analysis of bitcoin flows, the note said. There has been a large BTC inflow into larger wallets, which points to institutional investor demand.

This contrasts with previous quarters “when the bitcoin impulse was led by smaller wallets thus more driven by retail investors,” the report said.

Edited by Sheldon Reback.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Author placeholder image

Will Canny is CoinDesk's finance reporter.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.