Institutions interest in Bitcoin has fallen drastically, asserts JPMorgan analyst

Bitcoin, Institutions interest in Bitcoin has fallen drastically, asserts JPMorgan analyst
Photo by csamhaber on Pixabay
  • Institutional interest in Bitcoin(BTC-USD) has dried up or even turned negative, according to JPMorgan global market strategist Nikolaos Penigrtzoglou
  • Bitcoin’s market share falls to 46%, down from 60% at the beginning of April
  • “Healthy” price level at 50% or above

Nigeria (CoinChapter.com) — Institutional interest in Bitcoin surged earlier in the year due to the bull market. Companies like MicroStrategy led the charge in investing massive amounts of their portfolios in Bitcoin. In addition, megabank Goldman Sachs began offering investors Bitcoin and Ethereum options and futures.

While the market has generally welcomed the entrance of institutional investors into space, institutional interest in Bitcoin is now seeing a decline.

Also Read: 3 reasons why Ethereum (ETH) is rallying

According to Nikolaos Penigrtzoglou, a JPMorgan analyst, institutional investors had moved out of gold and went into Bitcoin in late 2019. But since April 2021, there has been a reversal of that strategy. He states that institutional interest in the asset has dried up or even turned negative.

Investors started pulling money from Bitcoin products to invest in physical gold ETFs. This started in April before the May correction occurred.

This decline may due in part to the price being too high. Interest from institutional investors only grows when the price is low enough to buy and make a profit. When Bitcoin crossed the $60K threshold, at that point, the asset looked too expensive to buy.

Bitcoin loses market share

According to Nikolaos Penigrtzoglou, BTC has lost a large market share since April. The coin had a market dominance of 60% in April. But now, the market share of Bitcoin has fallen to 46%. 

Also Read: Cream Finance to launch money market service on Polygon blockchain

Speaking on this, Penigrtzoglou explained that a “healthy” price level would be 50% or above. At which point institutional investors would be incentivized to return to the market.

During the interview with CNBC, Penigrtzoglou said that divergence had developed between Bitcoin and other cryptocurrencies, like Ethereum.

Bitcoin chart from TradingView.com
Bitcoin is less than 50% of market share at $674b market cap. Source: BTCUSD on TradingView.com

Will interest pick back up?

Commenting on if interest will ever pick back up, Penigrtzoglou disclosed that he thinks there will be a point where institutional interest would pick back up again, most likely when the price was at a more stable point.

Also Read: Bitcoin bulls unnerved against stronger dollar outlook, thanks to a classic technical pattern

Penigrtzoglou also predicted that market volatility will “normalize” from here on out.

Bitcoin is infamous for its incredibly volatile nature. Huge price movements in a short period of time are not out of the ordinary for the digital asset. In fact, it is one of the major reasons why investors choose digital assets.

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Bitcoin, Institutions interest in Bitcoin has fallen drastically, asserts JPMorgan analyst

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