According to JPMorgan Chase, Grayscale Investments, the world’s largest digital asset manager, could hold the key to Bitcoin (BTC)’s short-term price outlook.
As reported by Bloomberg, strategists led by Nikolas Panigirtzoglou believe that Bitcoin could lose its luster in the short term unless it can break out more than $ 40,000. The flagship cryptocurrency has breached this key level twice this month, once in the run-up to new everyday highs near $ 42,000 and the other just last week.
The strategists have determined that the Grayscale Bitcoin Trust, which currently has $ 23 billion in assets under management, will play a crucial role in whether or not BTC returns to that level.
They wrote:
“The inflow to the Grayscale Bitcoin Trust will probably have to maintain its rate of US $ 100 million per day for the coming days and weeks to find such an outbreak.”
If BTC is unable to recoup $ 40,000, the next traders could ‘propagate last week’s correction,’ analysts said. This means that the path of least resistance may be lower.
Since crossing $ 20,000 in December, the Bitcoin price has more than doubled in three weeks. The digital currency has been unbound for the past few weeks as traders search for the next major catalyst.
Meanwhile, Grayscale continues to have a major impact on the cryptocurrency market. The average weekly inflow of Grayscale’s digital asset products reached $ 250.7 million in the fourth quarter, an all-time high. The Bitcoin Trust generated an average of $ 217.1 million in weekly inflows.
As Cointelegraph reported last week, Bitcoin’s price rose sharply after Grayscale reopened its services to new investors on January 13.