In their “Flows & Liquidity” report, JPMorgan analysts say institutions are piling into bitcoin at a stronger pace this quarter than they were in Q3, and may have a bigger role in price movement than commodity trading advisors, or CTA.
The Friday report was written by Nikolaos Panigirtzoglou, Mika Inkenen and Ekansh Agarwal.
They said institutional investors are looking at bitcoin as a long-term investment. As proof, they cited the growing size in Q4 of Grayscale Bitcoin Trust, whose customers are mostly institutional.
In Q3, retail customers bought $1.6 billion worth of bitcoin using Square’s Cash App, some three times more than what was invested in Grayscale’s bitcoin product.
This quarter, however, the Grayscale Bitcoin Trust is at three times its Q3 numbers. There is no data at present for Square customers’ bitcoin buys.
Grayscale Investments is a digital asset management firm owned by venture capital firm Digital Currency Group (DCG), which also owns CoinDesk.
JP Morgan also speculates bitcoin’s failure to revert to its mean price in recent weeks is a sign that momentum traders such as CTAs have had a shrinking role in the market relative to institutions.