Deutsche Bank: “A large number of investors expect Bitcoin to fall below $20,000”
Deutsche Bank analysts got interesting results about Bitcoin and cryptocurrencies in a survey of 2,000 people.
The survey of 2,000 people in the US, UK and Europe was conducted after the Securities and Exchange Commission approved a Bitcoin exchange-traded fund (ETF) earlier this month.
According to the data, since the ETF launched on January 11, Bitcoin has dropped nearly 20% to $39,000.
More than a third of survey participants believe Bitcoin will fall below $20,000 by the end of the year. Additionally, more than half of respondents said that “major cryptocurrencies” will completely collapse within the next two years.
Looking specifically at Bitcoin, Deutsche Bank reports that 39% of survey participants think Bitcoin will continue to exist in the coming years, while 42% predict it will disappear.
“The results of the survey show a lack of understanding of cryptocurrencies, with two-thirds of people having little or no knowledge of these digital assets,” said Labore.
Labore added that the negative sentiment could be related to past events such as the collapse of FTX in 2022 and the SEC's lawsuit against Binance and Coinbase.
Labore wrote that despite Bitcoin's January slump, it still has upside potential in the coming months, including the upcoming SEC decision on spot Ethereum ETFs in May and the halving event. Bitcoin expected in April.
Layergg, a famous cryptocurrency analysis company, has compiled a list of potential FUDs that could occur in the coming period.
Grayscale expects to sell between 10,000 and 25,000 BTC per day. According to the analytics firm, the outflow is not slowing down but is actually increasing. Total capital outflow to date is $3.45 billion. Notably, FTX has sold nearly $1 billion of Grayscale GBTC since the Bitcoin ETF was approved.
BTC distribution by crypto exchange Mt.Gox is expected to take place within the next two months, with 200k BTC unlocked. In December 2023, certain Mt.Gox creditors received compensation in Japanese yen through PayPal. It is worth noting that the Bitcoin purchase price of most Mt.Gox holders was below $1000 USD, which may have influenced their decision to sell.
The US government currently holds approximately 100k BTC related to the Silk Road. They announced that they plan to sell 50k Bitcoin obtained from Silk Road in four tranches, but there have been no updates since July. However, this will likely continue after the ETF is launched.
Grayscale holds 7-8 billion USD Ethereum futures fund ETF ETHE. ETHE, similar to GBC, was until recently trading at a discount of up to 50% off its normal price. This is reminiscent of the possibility of an Ethereum version of the “ETF – Sell the News” phenomenon. Interestingly, FTX's ETHE holdings are only 1/4 of GBTC.
Global financial institution JPMorgan has warned that Grayscale's Bitcoin (BTC) fund, GBTC, could see further sell-offs in the coming weeks.
According to the bank, the $3 billion inflow into Bitcoin spot ETFs reflects rotation from existing bitcoin vehicles. “The bank further stated that this change shows “retail investors are moving away from digital wallets held by retail exchanges/brokers to cheaper spot bitcoin ETFs.” .
Grayscale converted its GBTC fund into a Bitcoin spot ETF following historic approval by the SEC (Securities and Exchange Commission) earlier this month. JPMorgan analyst Nikolaos Panigirtzoglou highlighted that the price of BTC dropped 10% after the launch of the Bitcoin spot ETF.
Panigirtzoglou stated, “It seems that profit-taking, i.e. buying the rumor/selling the actual momentum, has taken place in recent days as we had previously feared.”
Since January 12, Grayscale's Bitcoin fund, GBTC, has seen outflows of more than $2 billion.
Will the price of Bitcoin be affected?
According to Panigirtzoglou, outflows from Grayscale's GBTC fund will put "further pressure on bitcoin prices in the coming weeks." ' The analyst added, “If the previous $3 billion estimate proves correct and $1.5 billion has been withdrawn, there could still be another $1.5 billion to exit bitcoin space through profit taking on GBTC.”
The price of Bitcoin (BTC) was at risk of falling below $41,000. The asset's price is down 1.3% over the past 24 hours, 3.5% over the last week and 5.7% since December.
Furthermore, CoinCodex predicts a bearish price outlook for Bitcoin (BTC) in the coming weeks. According to the platform, the BTC price could drop to $36,182 by December 26, 2024. The price drop represents a drop of nearly 12% from current levels. However, the platform predicts BTC price will recover next month.
Furthermore, BTC will undergo a halving cycle in April, a bullish event. We can see the asset price gaining momentum in the weeks leading up to the halving.
