Bitcoin (BTC) reaches 37K! JPMorgan analysts skeptical of the surge in the cryptocurrency market.

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US Bitcoin ETF Approval Prospects Spark Market Concerns

According to The Block, analysts at JPMorgan expressed doubts about the recent surge in the cryptocurrency market, suggesting that the market may be overhyped.

They specifically noted the possibility of a US approval for a physical Bitcoin ETF, which, while seen as an industry win, is met with skepticism on whether it would bring in new capital. Analyst Nikolaos Panigirtzoglou mentioned in a report that existing capital may simply shift from existing Bitcoin products to the newly approved ETF, rather than injecting new capital.

Uncertain Future of Cryptocurrency Regulation

The analysts further emphasized that despite setbacks for the Securities and Exchange Commission in legal cases against Ripple and Grayscale, the future relaxation of cryptocurrency regulations remains uncertain. They believe that due to the unregulated nature of the crypto industry, the likelihood of significant regulatory tightening is unclear. Particularly considering the FTX fraud incident still fresh in people's memories, US lawmakers are unlikely to change their stance on this matter.

Impact of Bitcoin Halving Event Possibly Priced In

Regarding optimistic expectations for the 2024 Bitcoin halving event, JPMorgan analysts believe that the market has already factored in its impact. They point out that considering the predictability of the Bitcoin halving, its effect on prices should have already been absorbed by the market. Analysts anticipate that due to rising costs, less efficient miners will exit the market, a factor already reflected in the current Bitcoin price.

In conclusion, JPMorgan analysts maintain a cautious outlook on the future of the cryptocurrency market, predicting a "buy the rumor, sell the fact" phenomenon after the approval of a physical Bitcoin ETF.