Grayscale Investments, the world’s largest digital asset manager, could hold the key to Bitcoin’s (BTC) short-term price outlook, according to JPMorgan Chase.
As Bloomberg reports, strategists led by Nikolas Panigirtzoglou believe that Bitcoin may lose its luster in the short term, unless it can “burst” above $ 40,000. The flagship cryptocurrency has breached that key level on two occasions this month, one in preparation for new records of almost $ 42,000 and the other last week.
Strategists have determined that the Grayscale Bitcoin Trust, which currently has $ 23 billion in assets under management, will play a crucial role in BTC’s return to that level or not.
They wrote:
“The flow to the Bitcoin Trust in shades of gray would likely need to sustain its $ 100 million per day pace in the coming days and weeks for such a disruption to occur.”
If the BTC fails to resume $ 40,000, traders who follow the trend “may propagate last week’s correction,” analysts said. This means that the path of least resistance may be shorter.
Since the $ 20,000 break in December, Bitcoin’s price has more than doubled in just three weeks. The digital currency has seen a huge increase in recent weeks, as traders look for the next big catalyst.
Meanwhile, the gray scale continues to exert considerable influence over the cryptocurrency market. Average weekly inflows in grayscale digital asset products reached $ 250.7 million in the fourth quarter, setting a new historic record. The Bitcoin Trust generated $ 217.1 million in weekly tickets, on average.
As Cointelegraph reported last week, the price of Bitcoin increased dramatically after the gray scale reopened its services to new investors on January 13.