In a study conducted by JPMorgan the global investment company expressed concerns regarding the valuation of Bitcoin BTC -2.26% indicating that the cryptocurrency is possibly overvalued. This evaluation follows a decrease, in Bitcoins price challenging the belief that there would be a strong upward trend for this digital asset.
Nikolaos Panigirtzoglou, who leads the team of analysts at JPMorgan highlighted in a report issued last Thursday that despite the recent price adjustments Bitcoins market stance still shows signs of being overpriced. This assessment was made after analyzing market indicators such as futures position proxies and comparing Bitcoin futures with spot prices. The findings suggest a state of overvaluation for Bitcoin.
The report also discussed developments in the Bitcoin ETF market noting changes in investment behavior. After experiencing inflows for some time there was a shift with outflows from 10 spot Bitcoin ETFs that began trading early in January. Notably withdrawals from Grayscale’s Bitcoin trust (GBTC) were observed alongside $1.3 billion worth of BTC acquisitions by nine spot Bitcoin ETFs, within a six day timeframe.
Given the developments the JPMorgan team has expressed an approach, towards Bitcoins future price with the upcoming halving event. They believe that the current market conditions, which show signs of being overbought could result in profit taking activities potentially pushing Bitcoins price down.
This cautious viewpoint is in line with JPMorgans predictions, including a forecast made last month suggesting that Bitcoin could drop to $42,000 post April halving. The report also downplayed the significance of the Ethereum ETH -0.95% upgrade indicating that the market might have already factored in these events.
In an addition to the discussion JPMorgan’s CEO Jamie Dimon restated his doubts about cryptocurrencies by stating his lack of personal interest in investing in Bitcoin. This stance echoes the overall careful tone emphasized in the firms analysis emphasizing the complexities and uncertainties, within the cryptocurrency market.