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The Bitcoin price correction witnessed in the second half of 2019 may be seen in the coming weeks if there is a major slowdown in the inflows recorded by the Grayscale Bitcoin Trust.
Bitcoin (BTC) saw the best of its days in the past week since it made its emergence back in 2009 as it recorded an all-time high above $24,000. Analysts from JPMorgan Chase & Co (NYSE: JPM) as reported by Bloomberg have attributed much of this BTC price increase to the growth of large hedge funds specifically the Grayscale Bitcoin Trust, the decline of which may have a corresponding impact on the price of Bitcoin.
According to the JPMorgan strategists led by Nikolaos Panigirtzoglou, the Total Assets Under Management for the Grayscale BTC Trust topped $13.1 billion up from $2 billion at the start of December last year. The significance in the growth recorded got increased applause owing to the economic hardship ushered in by the COVID-19 pandemic, in what appears to be an unending crisis.
The Grayscale Bitcoin Trust recorded as much as $1 billion inflows per month from January and the strategists noted that it is hard to avoid describing Bitcoin as “overbought,” as inflows into the trust “are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics,” the strategists said.
According to Nikolaos and his team, the kind of Bitcoin price correction witnessed in the second half of 2019 may be seen in the coming weeks if there is a major slowdown in the inflows recorded by the Grayscale Bitcoin Trust. With Bitcoin known for its extreme volatility, price corrections in the face of a bull rally are not uncommon. Per the Bloomberg report, Bitcoin saw a dip of about 44% back in June 2019 after experiencing a new peak for the year.
Is Elon Musk Aiming to Join the Bitcoin (BTC) Party?
The crypto sphere over the weekend got an inclination to suggest that Tesla Inc (NASDAQ: TSLA) and SpaceX CEO Elon Musk may be aiming to join the Bitcoin investment party. This is insinuated based on a conversation that ensued on Twitter between the iconic CEO and Michael Saylor, the CEO of business intelligence and software firm MicroStrategy Incorporated (NASDAQ: MSTR) in which the latter Wall Street boss offered to reveal his Bitcoin investment ‘Playbook’ with Elon Musk.
Saylor told Musk in response to the latter’s inquiry about large transactions being carried out through bitcoin, that he has “purchased over $1.3 billion in #BTC in past months & would be happy to share my playbook with you offline – from one rocket scientist to another.”
With institutional investors representing the bulk of the clients of firm’s like the Grayscale Bitcoin Trust, other industry players such as FTX Derivatives Exchange may be competing to help Elon Musk carry out the bulk of his Bitcoin purchases whenever he makes up his mind as the offer is already on the table.
Bitcoin (BTC) price is currently down 4.37% to $22,459.29 at press time and according to CoinMarketCap.