JPMorgan Analyst Blames Bakkt for Recent Bitcoin (BTC) Price Crash
A research team at JPMorgan (JPM) led by analyst Nikolaos Panigirtzoglou believes Bitcoin’s decline from $10,000 to just below $8,000 can be attributed to the recent launch of Intercontinental Exchange’s (ICE) crypto exchange subsidiary, Bakkt.
According to a recent article by Bloomberg, JPMorgan released a report last Friday that cites the fact that Bakkt’s Bitcoin futures products are physically settled could have been a driving factor in the recent price decline.
“It may be that the listing of physically settled futures contracts (that enables some holders of physical Bitcoin e.g. miners to hedge exposures) has contributed to recent price declines, rather than the low initial volumes,” JPMorgan said in the report.
Adding to that hypothesis, the JPMorgan analysts also point to Bitcoin’s overbought technicals and long contract over-exposure as adding fuel to the downward price action.
“This position liquidation has also likely contributed to the sharp falls in Bitcoin prices this week,” the team said. “While the previous overhang of long Bitcoin futures positions appears to have cleared in Bitmex futures, this is not yet true for CME contracts.”
Notably, Bitcoin’s downward price action appears to be losing steam. After trading down around $7,700 earlier today, BTC has since recovered and is now up 5.1% on the day to $8,405.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.