JP Morgan Chase Pins Bitcoin Price Plunge on Bakkt and BTC Futures
Bitcoin suffered its biggest 7-day drop since November of 2018 after plunging this week from $10,198 to $7,926 by Thursday.
Strategists at JP Morgan Chase point to the tepid launch of Bakkt, the Bitcoin futures platform from Intercontinental Exchange designed to onboard Wallet Street investors.
While JP Morgan’s strategist lead Nikolaos Panigirtzoglou characterizes Bakkt’s launch as a sign of maturity for the crypto industry, he notes in a report dated Friday that it probably depressed prices, reports Bloomberg.
“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.”
JP Morgan’s analysis of Bitcoin’s latest performance tracked the impact of the Bitcoin futures market at large and a “more marked capitulation” of Bitcoin longs on BitMEX.
“This position liquidation has also likely contributed to the sharp falls in Bitcoin prices this week…
While the previous overhang of long Bitcoin futures positions appears to have cleared in Bitmex futures, this is not yet true for CME contracts.”