The crypto bear market has persisted since the beginning of the year, reaching its undeniable apex in November, with analysts from the major investment bank J.P. Morgan Chase stating that this persistence will drive out the institutional investors, as reported by Bloomberg on December 18.
Nikolas Panigirtzoglou and other analysts from the investment bank said, “Participation by financial institutions in Bitcoin trading appears to be fading.” The analysts released a research note on December 14 in which they claimed, “key flow metrics have downshifted dramatically,” in addition to the futures markets, signally institutional change.
Noting the decreasing index of the amount of open contracts on Bitcoin futures, on the Chicago Board Options Exchange (CBOE) global markets, they claim that the index has reached its “lowest levels” since the Bitcoin futures were launched in December 2017 which saw the price of the top crypto near $20,000 and spark a massive bull-run.
The report further stresses on the contracts by the Chicago Mercantile Exchange (CME) which they claim are “more widely used,” and are “near the bottom of 2018’s range,” as confirmed by the data obtained from the Commodity Futures Trading Commission (CFTC).
Last year, the daily median transaction size ballooned to $5,000 in 2017 owing to the fervor around the crypto market has now plummeted to around $160, as per data obtained from BitInfoCharts.com.
J.P. Morgan’s analysts concluded their note stating, “Other cryptocurrencies continue to suffer disproportionately during this correction phase.”
It bears no surprise that 2018 has borne the brunt of the fantastic highs of 2017, given the massive price increase across the coin market. Bitcoin [BTC] has lost over 80 percent of its high of $19,511 and is currently languishing at $3,800, on a road to recovery after a disastrous month of November. Other coins have also lost significant market cap, with the collective market cap dropping from $830 billion in January, to $103 billion in December.
Despite the terrible lows of 2018, the following year has signaled a movement of institutional investors. The ICE and NYSE backed Bakkt, the digital assets trading platform is set to launch in January, State Street and Fidelity Investments are planning on launching a crypto custody solutions, should the interest increase, Nasdaq is looking to launch a Bitcoin Futures product and the highly anticipated Bitcoin ETF is being tabled before the SEC in February.