Crypto
JPMorgan Doubts Crypto Inflows Will Remain as Robust
America’s largest bank says the state of the cryptocurrency market may not be sustainable.
This year has seen crypto net inflows of $12 billion thus far — a figure that could jump to $26 billion by year’s end assuming flows continue apace — a trend driven by demand for spot bitcoin exchange-traded funds (ETFs), JPMorgan Chase analyst Nikolaos Panigirtzoglou wrote in a note cited in a Sunday (June 16) report by Seeking Alpha.
While this number is impressive, Panigirtzoglou wrote it might not be entirely made up of new funds coming into the crypto space.
“We believe there has likely been a significant rotation away from digital wallets on exchanges to the new spot bitcoin ETFs,” he explained.
This movement is noticeable, he noted, as bitcoin reserves on exchanges have dropped by 220,000 BTC, or $13 billion, since the Securities and Exchange Commission (SEC) approved bitcoins ETFs in January.
“This implies that the majority of the $16 billion inflows into spot bitcoin ETFs since launch likely reflects a rotation from existing digital wallets on exchanges.”
Panigirtzoglou attributed the rotation to “the cost effectiveness, deeper liquidity, regulatory protection and convenience of the ETF wrapper that has become market participants’ preferred choice of instrument for bitcoin exposure for both existing and new crypto investors.”
All told, the analyst has doubts that crypto inflows will continue at the same pace for the remainder of 2024, considering how high the price of bitcoin is relative to the cost to produce one or when compared to gold.
This isn’t the first time this year that the banking giant has expressed its doubts about bitcoin ETFs, writing soon after the SEC’s ETF approval that the funds would draw money for existing crypto products but not attract new capital.
“We are skeptical of the optimism shared by many market participants at the moment that a lot of fresh capital will enter the crypto space as a result of the spot bitcoin ETF approval,” the banks’ analysts wrote in January.
Last month saw reports that venture capital investment in crypto companies had begun increasing after cooling for two years, climbing to $2.4 billion in the first quarter of 2024.
“The crypto industry is still in its early stages, and there is a lot of room for growth and innovation,” PitchBook senior analyst Robert Le wrote in a report quoted by Reuters.
“Barring any major market downturns, we expect the volume and pace of investments to continue increasing throughout the year,” he added.
Going into the weekend, the price of Bitcoin was unable to sustain the bullish momentum it displayed earlier in the past week. Since Friday, January 16th, the world’s leading cryptocurrency, repudiated by the price resistance above, now trades in a tight consolidatory bracket. Interestingly, this period of silence has been deemed transient, as recent on-chain data suggests an exciting time ahead for the BTC price.
Kimchi Premium Flips Positive As Local Demand Sees Buildup
In a January 17 post on the X platform, DeFi asset management platform XWIN Finance released an on-chain report, which suggests that Bitcoin might be closer to reaching a turning point than is apparent in its price action.
This hypothesis is based on the Bitcoin Kimchi Premium indicator. This measures the percentage difference between a cryptocurrency’s price (in this case, Bitcoin) on South Korean exchanges and its price on global exchanges. Simply put, it shows how much more Korean traders are willing to pay for Bitcoin.
When the Kimchi Premium transitions steadily from low or negative levels to cross above historically significant levels, this is typically viewed as a long signal from the metric. This interpretation is because a rising Kimchi Premium reflects growing local demand in South Korea, usually often influenced by retail buyers.
In essence, Korean buyers are willing to pay more for Bitcoin, hence overwhelming the available supply and consequently pushing prices upwards.
In the post on X, XWIN Finance highlighted that this long signal had been sighted on the indicator. History also attests to the bullish significance of this signal; there have been major price moves to the upside following sustained increases in the Kimchi Premium.
An example is the last sighting of the long signal in October 2023, where the index rose above a major threshold, as shown in the chart above. The price of Bitcoin witnessed a 370% rally after this signal went off in 2023.
According to XWIN Research, this same pattern seems to be playing out again in 2026. Hence, if the Kimchi Premium completes its long-signal formation, it could be a sign that buyers are occupying favourable positions for a bullish ride.
If history does repeat itself, the Bitcoin price could be on track to witness another exciting voyage, with the flagship cryptocurrency possibly putting in a more than 300% surge in the next cycle.
However, it is worth noting that macro conditions, institutional demand, and derivatives activity would be playing their roles to augment the pattern’s plausibility, as it should not be viewed as a standalone bullish sign.
Bitcoin Price At A Glance
As of this writing, the price of BTC stands at around $95,280, reflecting no significant change in the past 24 hours.
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