Financial giant JPMorgan says that Bitcoin’s (BTC) ETF demand has been overstated by 2X. The bank believes that not all inflows represent fresh money entering the crypto space. The bank stated, ‘We believe there has likely been a significant rotation away from digital wallets on exchanges to the new spot bitcoin ETFs.‘ The rotation away from digital wallets is reflected in the declining reserve of BTC on exchanges.
According to the bank, the development could be because of cost-effectiveness, deeper liquidity, regulatory protection and convenience of the ETF wrapper. The bank also notes that ETFs have become the preferred choice for BTC exposure.
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BTC ETFs have seen significant inflows since their approval by the US SEC in January of this year. The BTC ETF inflows also led to a market-wide rally, leading to the original cryptocurrency hitting a new peak of $73,737 in March.
Will Bitcoin face a correction?
BTC is currently hovering just above $67,000. The asset is down by over 9% from its March 2024 highs. BTC’s price went through a significant correction over the last few days, falling nearly 6% in the weekly chart and 1.7% in the 14-day chart. Nonetheless, the asset is still up by 8.2% over the previous month.
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Although Bitcoin (BTC) has undergone a correction, its price may rebound very soon. Some analysts anticipate BTC to climb to a new all-time high soon. One platform predicts the original cryptocurrency to reach $87,477, a 30.4% rally from current levels.
Inflation in the US was also lower than expected for the month of May. Low inflation rates could lead to an early interest rate cut. Low interest rates may boost investor sentiment to buy more crypto.
