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Institutional Interest Drives Bitcoin's Recent Impressive Performance, JPMorgan Reports

Oct 28, 2023 at 09:42 am

According to a research report by JPMorgan, there is growing optimism surrounding the potential approval of a Bitcoin (BTC) exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). This optimism is being substantiated by Bitcoin's remarkable outperformance compared to other digital assets, with the world's largest cryptocurrency achieving a new annual high.

The report highlights that this recent surge in Bitcoin appears to be driven by institutional participation. Analysts, led by Nikolaos Panigirtzoglou, noted that there is evidence of institutional involvement in this latest flow impulse. This assertion is supported by JPMorgan's analysis of the cryptocurrency futures market.

JPMorgan's analysis, based on CME Bitcoin futures, which are primarily utilized by institutional investors, reveals a significant spike in futures positions over the past week. Not only have these positions reached the highest level for the year, but they have also surpassed levels last observed in August 2022, preceding the FTX exchange collapse.

In contrast, the equivalent futures position proxy for CME Ethereum (ETH) futures remains relatively subdued.

The report further underlines institutional participation in the recent Bitcoin rally by examining Bitcoin flows. Notably, there has been a substantial inflow of Bitcoin into larger wallets, signaling strong demand from institutional investors.

This marks a departure from previous quarters when Bitcoin price surges were primarily driven by smaller wallets, indicating a retail investor-driven trend.

Read more: SEC's Possible Approval of Spot Bitcoin ETF in Coming Months Predicted by JPMorgan

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