It was leaked in an article from Forbes that analysts at Wall Street lynchpin JP Morgan have “warned big investors have begun pivoting out of bitcoin futures and into Ethereum amid a “strong divergence in demand.”
The analysts, who sent this information in a note to clients, mentioned that what they are seeing indicates a “setback for Bitcoin” and reflects “weak demand” by institutional investors. The institutional investors that JP Morgan is referencing are those that tend to use CME futures to gain their exposure to bitcoin.
As we have mentioned, September tends to historically be a very weak month for bitcoin, posting red for the last 6 out of 8 years. JP Morgan pointed “to bitcoin futures on the CME trading below the bitcoin price though September”. According to the report, the Morgan researchers found that “big investors” are swapping their bitcoin future positions for Ethereum positions.
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The increase in demand, according to the private letter sent out to investors, is because of expectations that DeFi on Eth will seriously compete with traditional finance. The data from JP Morgan showed that the “21-day average Ethereum futures premium rose to 1% over actual ether prices”. The analysts wrote that this indicates healthier demand for Eth from institutional investors. It also means these investors are more bullish on Eth than Btc.
This month, JPMorgan managing director Nikolaos Panigirtzoglou mentioned how retail investors are put lots of capital into alt-coins and that bitcoin’s market share getting slimmer by the day. This has become especially true as layer 1 chains that are not bottlenecked by gas are making a massive dent in the market, such as Solana, Algorand and Avalanche, all now solidified in the top 15 by market cap, when just months ago both were in the 40’s.
What JP Morgan said lines up with what people like that Cathie Wood have said recently. She even admitted that she is becoming more and more bullish on Eth, saying that her confidence in it has “gone up dramatically. She said she is “fascinated” with what is going on in DeFi stating that it is “collapsing the cost of the infrastructure for financial services in a way that I know that the traditional financial industry does not appreciate right now”.
It appears that JP Morgan, an absolute behemoth on Wall Street, is bullish on Ethereum. Moreover, just last month they allowed “financial advisors to begin placing private bank clients into a new bitcoin fund created with crypto firm NYDIG”. Also, they “rolled out” access to Grayscale and Osprey funds–both crypto funds. It is all very interesting in light of the fact that Morgan’s CEO Jamie Dimon has basically been a crypto hater for a long time.
Nevertheless, it is a fact that there is a lot of big money pouring into alt-coins, and from major institutions, big players, and retail of course. The big money is no longer flowing through bitcoin alone, but other alt-coins are actually forging their own place in the market. Ethereum is certainly taking a lot of this money that bitcoin would normally get, and JP Morgan confirms the demand for Eth is major.
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