JP Morgan Analyst: “The strong rise in virtual currency prices is due to increased interest from individual investors”

9 months ago 59

Interest from individual investors soars

Analysts at US financial giant JPMorgan said on the 22nd that increased interest from retail investors was likely responsible for the strong rally in cryptocurrency prices in February. He also cited three factors that are driving interest.

Additionally, looking at cumulative on-chain Bitcoin (BTC) flows, we see a larger influx from smaller wallets, which suggests retail investor participation.

Cryptocurrency exchanges like Coinbase also saw an increase in trading activity from individual investors. The GMCI30 index, which measures the performance of the top 30 cryptocurrencies, is up more than 13% since the beginning of the year.

Furthermore, the popularity of AI (artificial intelligence) related stocks and meme tokens in the overall cryptocurrency market recovered in February, suggesting that retail investors are increasing their interest in cryptocurrencies. It is said that

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What is meme coin?

In general, coins that gain popularity by being talked about on the internet. A typical example is Dogecoin (DOGE), whose trading volume has increased rapidly after Elon Musk mentioned it on social media. There is also SHIBA INU (SHIB), which was released in 2020 based on Dogecoin.

Virtual currency glossary

Three factors behind this

Analysts at JPMorgan noted that retail investor interest in cryptocurrencies, similar to stocks, has been surging since the end of last year.

There are three factors behind this, including the Bitcoin halving, the next upgrade of the Ethereum (ETH) blockchain called “Dencun”, and the possibility of approval of the Ethereum spot ETF.

connection:
Ethereum next upgrade Dencun, mainnet launch on March 13th

He also opined that the Bitcoin halving and Dencun are already “almost factored in.” It also points out that there is only a 50% chance that an Ethereum spot ETF will be approved in May.

As for when the Ethereum spot ETF will be approved, nine companies have applied for listing, including BlackRock, ArkInvest, Grayscale, and Franklin Templeton.

The key date for now is May 23, the deadline for the U.S. Securities and Exchange Commission (SEC) to decide on VanEck's ETF listing application.

Opinions are divided even in the financial industry regarding the timing of approval. Some say it will be approved on May 23rd, while others predict that approval will depend on the political situation in the United States and the judgment on Ethereum's security, and that it may take a year or two later.

connection:
U.S. investment bank TD Cowen: “Approval of Ethereum spot ETF will probably take place after the second half of next year.''