The odds of a Bitcoin correction would increase if the flows into the world’s largest traded cryptocurrency fund slow significantly, according to strategists at JPMorgan Chase & Co.

The Grayscale Bitcoin Trust’s assets under management have climbed to $13.1 billion from $2 billion at the start of December last year, amid a tripling in the digital currency’s price so far in 2020. Inflows into the fund are running at about $1 billion per month, the strategists led by Nikolaos Panigirtzoglou wrote in a note Friday.

While it’s hard to avoid describing Bitcoin as “overbought,” the flows into the trust “are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics,” the strategists said. A major slowdown in those flows would boost the risk of a Bitcoin correction akin to the one in the second half of 2019, they said.

(Excerpt) Read more Here | 2020-12-20 22:58:00
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