Markets
Crypto markets have seen $12 billion in net inflows this year, says JPMorgan (JPM)
Digital assets have seen $12 billion in net inflows year-to-date, and if flows continue at the same pace, the number could grow to $26 billion by the end of the year, JPMorgan (JPM) said in a report. poll on Wednesday.
Bitcoin spot (BTC) Exchange-traded funds (ETFs) led the way, attracting $16 billion in net inflows, the report states. This number, when combined with future flows from the Chicago Mercantile Exchange (CME) plus capital raised by crypto venture capital funds, increases the total flow into digital asset markets this year to $25 billion.
Still, not all of these inflows are new money entering the crypto space. “We believe there has likely been a significant shift from digital wallets on exchanges to the new spot bitcoin ETFs,” wrote analysts led by Nikolaos Panigirtzoglou.
This rotation is evidenced in the drop in bitcoin reserves on exchanges since the launch of spot ETFs in January, which is estimated at 0.22 million bitcoin or $13 billion, the bank said.
“This implies that the majority of the $16 billion inflow into spot bitcoin ETFs since launch likely reflects a rotation away from existing digital wallets on exchanges,” the authors wrote. Using this assumption reduces the net flow into digital assets year-to-date from $25 billion to $12 billion, the bank said.
This $12 billion net inflow is stronger than last year, but is notably lower than during the 2021/2022 boom, the report added.
Given how high the price of bitcoin is relative to miners’ cost of production or relative to the cost of gold, JPMorgan said it is skeptical that inflows will continue at the same rate throughout the rest of the year.