JPMorgan: Bitcoin needs to reach US$40,000 and Grayscale has it in hand

The BTC price is at a key inflection point, JPMorgan strategists say.

JPMorgan Chase says Grayscale Investments, the world’s largest digital asset manager, may hold the key to Bitcoin’s (BTC) near-term price outlook.

As Bloomberg reports, strategists led by Nikolas Panigirtzoglou believe Bitcoin could lose momentum in the short term unless it can „break out“ above US$40,000. The flagship cryptocurrency broke through this key level twice this month. Once just before the new all-time high at around US$42,000 and the other time just last week.

The strategists explained that the Grayscale Bitcoin Trust, which currently manages US$23 billion in assets, will play a crucial role in whether or not BTC returns to this level.

They wrote:

„The inflow into Grayscale Bitcoin Trust would likely need to maintain its pace of US$100 million per day in the coming days and weeks for such a breakout to occur.“
If BTC fails to climb back above US$40,000, „trend-following“ traders could continue last week’s correction, analysts said. This means that the path of least resistance could be further down.

Since breaking above US$20,000 in December, the bitcoin price has more than doubled in just three weeks. The digital currency has been trading within a range in recent weeks as traders look for the next catalyst.

Meanwhile, Grayscale continues to exert significant influence on the cryptocurrency market. Average weekly inflows into Grayscale’s digital asset products reached $250.7 million in the fourth quarter, setting a new all-time high. Bitcoin Trust averaged $217.1m in inflows per week.

As Cointelegraph reported last week, the bitcoin price surged after Grayscale reopened its services to new investors on 13 January.