NEW YORK – Popular cryptocurrencies such as Bitcoin and Ether are rising to multi-year highs as retail investors take advantage of the market after a pause in January, according to strategists at JPMorgan Chase & Co. It seems that it is coming back.
On-chain Bitcoin flows from small wallets used as proxies for retail traders have moderated inflows into a new spot Bitcoin exchange-traded fund (ETF), according to a team led by Nikolaos Panigirtzoglou. After that, the flow far exceeds that of institutional investors.
With the largest digital asset trending upward for six months, investors are likely looking ahead to some important developments in this space.
“The resurgence in retail demand in February likely reflects expectations of three major cryptocurrency catalysts in the coming months: the Bitcoin halving event, the next major upgrade of the Ethereum network , and the expected approval of a Spot Ethereum ETF by stock exchanges, with a committee meeting in May,” strategists at the bank wrote.
“We think the first two catalysts are pretty much priced in, but we think the third catalyst has only a 50% chance.”
Inflows into newly approved spot Bitcoin funds have been orchestrated because large institutional wallets are holding funds from retail traders who recently bought new funds, making them appear larger than they actually are. The report points out.
The rise in retail investment in February appears to be part of a larger trend. According to recent reports from Block, PayPal and Robinhood Markets, customer purchases of Bitcoin in the fourth quarter of 2023 were net positive, a significant improvement from negative sales in the third quarter, strategists said.
Meanwhile, the largest U.S. cryptocurrency exchange, Coinbase Global, reported its highest quarterly Bitcoin trading volume in two years.
Investments in artificial intelligence and meme tokens (a popular asset among retail traders) in the crypto market have also been notable in recent weeks, capturing a larger share of the total crypto market, according to the report. .bloomberg
