The crypto industry has soared since February due to renewed interest among retail investors in their favorite cryptocurrencies such as Bitcoin and Ether. JPMorgan Chase strategists reveal that after subtracting flows into new spot Bitcoin exchange-traded funds (ETFs), on-chain Bitcoin flows from small wallets exceed flows from institutional investors. did. Bloomberg reported recent findings from a JPMorgan analysis.
Strategists led by Nikolaos Panigirtzoglou wrote that February's resurgence in retail impulses could be explained by three key expected factors: the Bitcoin halving event, the Ethereum network The next major upgrade is the potential approval of Spot Ethereum by the U.S. Securities and Exchange Commission. ETFs for May.
The Bitcoin halving, scheduled for May 2024, will reduce the production of new Bitcoins from the network by half, creating scarcity and potentially increasing the price of this digital asset. The next major update to the Ethereum network, called Ethereum 2.0, will introduce a new consensus mechanism, making the network more scalable and secure, and reducing power consumption.
The SEC's approval of an Ethereum spot ETF will allow investors to gain exposure to the second-largest cryptocurrency by market capitalization without having to worry about technical issues with purchasing or storing it. According to them, his first two catalysts are almost priced in, but for the third he is given a 50% chance.
Retail surge signals momentum for cryptocurrencies
The surge in retail interest in cryptocurrencies in February is part of a broader pattern for the fourth quarter of 2023, according to the report. Statements from Block Inc., PayPal Holdings Inc., and Robinhood Markets Inc. refer to recent reports that observed net purchases of Bitcoin by customers in the final quarter of 2023. Sales were negative. previous quarter.
The report also noted that Coinbase Global, the largest U.S.-based cryptocurrency exchange, reported its highest quarterly Bitcoin trading volume in two years. Another sign of growing retailer interest in the crypto market is the emergence of AI and meme tokens. These tokens are usually coveted by public traders due to their newness and the chance to earn high profits.
The report concluded that the retail impulse in the crypto market is likely to continue for the foreseeable future as more investors seek to profit from the opportunities and innovations offered by the emerging asset class.
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