JPMorgan sees new wave of Bitcoin selling by algotraders

Quantitative crypto funds played a major role in the sharp drop in Bitcoin on November 25-26 and may return to this practice in the near future. This view was expressed by JPMorgan’s chief strategist Nikolaos Panigirtzoglou, Bloomberg reports.

“The shift toward Bitcoin buyers has largely diminished. If the price does not show a rapid recovery, another wave of long-position liquidations could follow,” the analyst says.

JPMorgan cited as a catalyst sales of speculation about plans by the U.S. Treasury to require financial companies verify owners of non-custodial wallets before withdrawals.

Nikolaos Panigirtzoglou suggested focusing on investment flows into the Grayscale Bitcoin Trust (GBTC) as the main indicator.

“A lack of additional inflows into GBTC in the coming weeks would call into question the idea of replacing gold with Bitcoin by institutional investors as a long-term investment,” the expert explained.

Earlier this weekend, it emerged that investment company Guggenheim Partners, with assets over $200 billion, allocate a portion of its portfolio to the Grayscale Bitcoin Trust.

Earlier in November, the total value of crypto assets under Grayscale Investments surpassed $10 billion.

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