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According to Bloomberg, analysts from JPMorgan Chase & Co. have indicated that the prolonged crypto slump is chasing away institutional investors.
According to the research, median transaction size falling from around $5,000 to around $160 over the last year, and interest in Bitcoin futures on Cboe Global Markets has declined significantly, both of which indicate that professional investors are pulling out of the space, almost certainly as a reaction to the massive fall from BTC at almost $20,000 at this time last year to this year’s low which approached $3,000. The researchers note that the investor pullout is not limited to Bitcoin, and rather ‘other cryptocurrencies continue to suffer disproportionately during this correction phase.’
The research note also points to declining hash rate as a sign that Bitcoin mining is decreasingly economical, and that many miners are forced to turn their mining rig off as the rewards do not pay for the cost of electricity and mining rigs. While Bitcoin had a brief uptick less than a week ago, it does not appear this was the recovery let alone the bull run that crypto is so thirsty for in this crypto drought, but rather an example of the ‘sharp rallies [which] should expected as the market is extremely over-sold by most metrics.’
Crypto now has an uphill battle coaxing investors back into its fold, if they are to provide the capital infusion which many in the space have been relying on to bring crypto to the next level of value.
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