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After the temporary burst of optimism following the launch of Bitcoin ETFs, the price of the largest cryptocurrency came to a standstill, and the movement of funds traded on the exchange also does not bode well for the future of the segment, and this could ultimately lead to this Even the collapse of the crypto exchange Coinbase, experts from JPMorgan pointed out in a recent report.
According to JPMorgan, Coinbase could also be affected by its deep run.
Photo: Joao Luiz Bulcao / AFP
JPMorgan: Take back Coinbase
According to investment experts, there is uncertainty surrounding ETFs The increased market sentiment was enough to usher in spring for the crypto market after the long, gloomy winter, but in the long term the momentum will fade and investors will be disappointed.
Simultaneously with the announcement of their negative outlook, JPMorgan experts lowered the rating of Coinbase shares from neutral to negative for the first time in their history, thereby recommending an underweighting of the securities of the largest cryptocurrency exchange. Analysts are still targeting Coinbase shares at $80, which is 38 percent below the current price.
Last year, Coinbase shares rose nearly 400 percent alongside the rise in the price of Bitcoin, but this year they lost 20 percent of their value while the exchange rate fell just 9.5 percent.
Over the summer, Coinbase’s price rose spectacularly after BlackRock filed its Bitcoin ETF
Ken Worthington, the company’s analyst, said in the note:
There is a good chance that interest in crypto ETFs will continue to decline, leading to lower exchange rates and declining trading volumes, resulting in less additional earning opportunities for Coinbase.
The expert therefore suggests that although Coinbase, as a broker, is responsible for processing most transactions in connection with Bitcoin ETFs, it can only charge a significantly lower commission for these corporate orders than for the direct crypto purchases of its private customers. , and that will result in a huge loss of revenue for the company even if, contrary to JPMorgan’s expectations, interest in ETFs does not decline.
Bitcoin ETF turnover reached $20.4 billion in the first eight days of trading (excluding BlackRock’s yet-to-be-released figures), half of which, $10.9 billion, severely negatively impacted Greyscale’s closed-end exchange-traded fund. In fact, a large portion of collapsed crypto exchange FTX’s assets were previously tied up in this fund, which is now being held during liquidation proceedings Lawyers began selling quickly, collecting more than $1 billion in bets in the first seven days.
Update for the #Bitcoin ETF Cointucky Derby. The result was $515 million $GBTC today for a total of $3.96 billion in outflows. Newborn 9 grossed $249 million. However, I’m still waiting for BlackRock’s numbers. Probably another net outflow day unless $GO grossed more than $266 million. pic.twitter.com/nYFIAsIn2A
– James Seyffart (@JSeyff) January 24, 2024
In the first eight days, a net $3.96 billion flowed out of the Grayscale fund, reducing the ETF’s share capital to $20.5 billion. The Bitcoin fund market (excluding BlackRock’s latest figures) currently has $25 billion under management.
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