By
Steve Muchoki
April 19th, 2024
JPMorgan noted that the 21-day moving average for ethereum futures premium rose to 1% over actual ether prices, according to metrics provided by CME.
In a note to investors on Wednesday, JPMorgan analysts wrote that big investors are moving away from Bitcoin futures towards Ethereum futures. According to the report, Bitcoin futures provided by the Chicago Mercantile Exchange traded below the actual BTC price in September.
“This is a setback for Bitcoin and a reflection of weak demand by institutional investors that tend to use regulated CME futures contracts to gain exposure to Bitcoin,” JPMorgan analysts noted.
Usually, Bitcoin futures tend to trade at a higher price than the actual price due to several underlying factors. Among them is the fact that the storage cost for Bitcoin is high especially due to increasing crypto theft.
JPMorgan noted that the 21-day moving average for ethereum futures premium rose to 1% over actual ether prices, according to metrics provided by CME. Hereby pointing out a stronger demand for Ethereum products than the leading crypto asset by market capitalization, Bitcoin.
JPMorgan and the Crypto Futures Market
JPMorgan has significantly ventured into the crypto industry, as most of its clients continue to demand different crypto products. In July of this year, the bank launched crypto trading using four Grayscale products and one from Osprey Fund.
As for the Bitcoin price target, JPMorgan has set its long-term target at $130,000. However, analysts at the bank have been changing the price target several times previously, mostly inspired by changing market conditions.
The bank has shown great interest in crypto assets despite the regulations in the country not being so clear. The current SEC chair Gary Gensler has, however, embarked on a journey to regulate and protect investors from exploitation.
On the Flipside
Bitcoin and Ethereum, the two largest crypto assets by market capitalization, have continued to attract more institutional investors over time. Moreover, they are the most regulated and globally accepted crypto assets. Combined, they both account for approximately 60% of the entire crypto market.
According to market analytics provided by CoinGecko, Bitcoin traded around $44,400 at the time of reporting, up 1% in the past 24 hours. On the other hand, Ethereum traded around $3,097.
While Bitcoin had a market cap of approximately $836.7 billion, Ethereum had a market capitalization of approximately $364.7 billion.
Notably, the entire crypto market cap stands at around $2.07 trillion, having jumped approximately 1% in the past 24 hours.
Ethereum continues to face stiff competition from other smart contract blockchains like Solana. However, most of the dominant DeFi apps are built in the Ethereum ecosystem, despite the high fees and low transaction throughput.