JPMorgan Analysts Cite Institutional Interest in Bitcoin as the Crucial Bolstering Factor

While many financial assets have recorded in 2020 as a bad year, Bitcoin (BTC) has had a remarkable run and has grown by more than 220% on a year-to-date basis.

Q4 2020 has turned out to be the most favorable for the benchmark cryptocurrency, as it has doubled its value since October and has recorded a new all-time high at $24,300.

Meanwhile, JPMorgan Chase & Co recently reported what they believed were the main reasons for the dramatically bullish performance. The analysis, led by Nikolaos Panigirtzoglou, alluded that the rally could be unsustainable because it is getting sponsored by speculative quants funds. However, the strategists noted that institutional interest was also a key and more reliable factor in the rally.

The analysts doubled-down on a previous report, which highlighted the increasing influence of Grayscale. The crypto assets management fund currently serves as the go-to solution for institutions looking for exposure to BTC or other cryptocurrencies who don’t want to bother with storing the funds for a premium fee.

Although the firm began the year with $2 billion assets under management, Grayscale currently boasts more than $15 billion in AUM. The Grayscale Bitcoin Trust accounts for more than $13 billion of the total asset holding.

That said, the JPM analysts explained that the inflows into BTC Trust are just large for them to allow momentum traders to derail the trend into negative territory.

 

Key BTC Levels to Watch — December 21

Bitcoin saw a sharp correction from its newly-set ATH around $24k earlier today. However, bulls have staged a healthy recovery to the $23,275 – $22,380 pivot zone.

That said, we could see a resumption of the downward pressure if bulls don’t facilitate a strong comeback above $23,300 in the coming hours. However, a fall from his level cannot be sustained, considering the current market trend.

Meanwhile, our key resistance levels are at $23,270, $23,500, and $23,781. While our key support levels are at $22,380, $21,750, and $21,000.

Total market capital: $646 billion

Bitcoin market capital: $430 billion

Bitcoin dominance: 66.5%

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