JPMorgan: GBTC Profit-Taking Essentially Over, Limited Downside for Further Bitcoin Decline

JPMorgan stated that with the profit-taking from the Grayscale Bitcoin Trust (GBTC) mostly concluded, the downward pressure on Bitcoin prices has eased. The analyst team led by Nikolaos Panigirtzoglou indicated that since the shift to spot Bitcoin ETFs two weeks ago, GBTC has experienced outflows of $4.3 billion, exceeding JPMorgan's earlier estimate of around $3 billion in outflows. Therefore, it can be inferred that the profit-taking from GBTC has mostly finished, suggesting that the major downward pressure on Bitcoin from this channel should be over. However, if the 1.5% fee of GBTC is not reduced soon, the fund might experience sustained outflows, potentially losing market share to competitors.

The analysts also mentioned that although the introduction of spot Bitcoin ETFs may appear to fragment liquidity on the surface, in reality, guided by the experience of traditional asset class ETFs like stocks, spot ETFs are expected to enhance market depth and liquidity. Therefore, the advent of spot Bitcoin ETFs is anticipated to make the price discovery process for Bitcoin more efficient.