Analysts of the massive finance firm JPMorgan Chase & Co., including global market strategist Nikolaos Panigirtzoglou evaluates the bearish market and the way it has impacted the major investors since long. The research carried out by them, states that the prolonged crypto bear market is getting scary for institutional investors.
In a research note on December 14, the JPMorgan team wrote, “Participation by financial institutions in Bitcoin trading appears to be fading.” The research team has concluded, “Key flow metrics have downshifted dramatically” hinting a decline in the Bitcoin futures market.
Panigirtzoglou believes that crypto trading volumes have fallen, indicating a decreased in the index of open interest (OI) — the number of open contracts on Bitcoin futures on the Chicago Board Options Exchange (CBOE) global markets. JPM notes that in the past month, the index reached its “lowest levels” since the launch of Bitcoin futures trading.
The expert team has addressed Crypto miners also. It says that the downward trend of the market has caused mass attrition among unprofitable miners. The report said, “This suggests that prices have declined to a point where mining is becoming uneconomical for some miners, who have responded by turning their mining rigs off.”
However, this is not the first time JPMorgan Chase & Co being skeptic about digital assets. Jamie Dimon, the CEO of JPM bank has bashed cryptocurrency previously, and called it “a fraud.” Though, he praised the blockchain technology, stating, “Blockchain is real, it’s technology, but bitcoin is not the same as a fiat currency.”
About mining, market insiders also shared their views claiming that having a focus only on mining costs makes analysts lose vision of the big picture.
Barry Silbert, the founder of crypto investment fund Digital Currency Group, stated that mining costs are not the correct benchmark with which to value the asset class. He said, “You have to separate the investment decision that a miner is making from the operating cost for them to mine the bitcoin.” He firmly believes that crypto mining operations hold a long-term focus.