According to JP Morgan analysts, the expiration of the GBTC shares lockup period may prompt institutional investors to sell them soon, resulting in a further drop in the Bitcoin price.
By the end of June, the six-month lock-up period for Grayscale Bitcoin Trust (GBTC) shares will have expired. According to JP Morgan analysts, this might put more negative pressure on the price of Bitcoin (BTC).
JP Morgan strategist Nikolaos Panigirtzoglou wrote in a note on Wednesday, June 23, that the unlocking might lead to more institutional selling of GBTC shares. The price of Bitcoin has recently experienced a lot of fluctuation.
Bitcoin (BTC) is under pressure today after pushing back over to the $34,000 mark from Tuesday’s lows.
BTC is currently trading at $32,990, with a market capitalization of $613 billion, as at the time of writing.
JP Morgan maintains its pessimistic view on Bitcoin (BTC). The strategists at JP Morgan, according to Bloomberg, wrote:
“Despite this week’s correction we are reluctant to abandon our negative outlook for Bitcoin and crypto markets more generally. Despite some improvement, our signals remain overall bearish”.
According to the Strategists, BTC will swing between $23,000 and $35,000. This is based on fair value estimations and a comparison of BTC volatility to Gold.
“It would still need price drops below the $25,000 level before longer-term momentum would imply capitulation,” the strategists warned.
JP Morgan’s remarks are particularly interesting because the GBTC discount has reduced significantly in the recent week. According to CoinGape, the discounted price of GBTC shares has increased by 66% since last week.
Nonetheless, in relation to the net asset value, the GBTC shares still trade at a 5 percent discount. Many analysts disagree with JP Morgan’s point of view. This is due to the fact that six months ago, the GBTC shares were trading at a large premium.
In March 2021, the Premium for GBTC shares was converted to a Discount. According to analysts, institutional investors that bought the stock at a high premium will not sell at the current low price.
As a result, with the June-end expiry date approaching, there may be less selling pressure.