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Bitcoin Stabilizes, JPMorgan Predicts August Rebound
Bitcoin remains stuck in the $57,000 area. JPMorgan says the negative trend in bitcoin price will reverse in August.
Analysts supported Iris Energy shares a day after they were dragged down by a short-seller report.
US spot Bitcoin ETFs have been buyers this week.
Bitcoin price is stuck.
Despite a brief rally following better-than-expected consumer inflation data or comments from the Fed this week, the cryptocurrency’s price has recently returned to around $57,000. JPMorgan analysts believe the cryptocurrency could overcome its price inertia in August.
Meanwhile, the market-leading cryptocurrency was recently trading just above $58,000, up slightly over the past 24 hours.
Why is Bitcoin price stuck?
It seems that supply and demand pressures are canceling each other out.
The German government has continued to sell bitcoin, though it is beginning to scale back those sales. It still holds 3,846 bitcoins (worth about $222 million) on the blockchain; however, the European nation has transferred about $3 billion worth of the cryptocurrency since early June, according to data from Arkham Intelligence. Coinbase Germany CEO Jan Sell told DL News that the amount of bitcoin sold as part of Germany’s liquidation process is not very large compared to normal volumes.
Bitcoin Cash Exchange Traded Funds (ETFs) in the United States (AND F) bought financial products, with about $79 million flowing in on Thursday, according to Farside Investors. That brought the week’s inflows to more than $737 million.
The recent news-driven downward pressure on bitcoin prices is nearly over, JPMorgan analysts wrote, suggesting prices could recover next month.
Bitcoin-related stocks in the spotlight
MicroStrategy (MSTR) stock continued its upward trend a day after the announcement a 10-for-1 stock splitup about 5% in recent trading on Friday.
Shares of bitcoin mining company Iris Energy (IREN) rose 10% in early trading, with The Block reporting that analysts at Bernstein came to its defense after a report from a short seller. Iris shares fell 13% Thursday after Culper Research said the company is worth much less than its current valuation.
Shares of Block (SQ) rose nearly 3% after Bernstein analysts estimated the company’s deal to supply mining equipment to Core Scientific (CORZ) at about $300 million. Core shares were recently up more than 2%.
SEC set to ease stance on cryptocurrency custody
On the regulatory front, the U.S. Securities and Exchange Commission (SEC) is set to allow exceptions to its SAB 121 guidance, according to Bloomberg Law. The rule in question, which concerns the custody of crypto assets on behalf of clients, is seen as restrictive for traditional financial firms, and a change in the SEC’s stance could help drive broader adoption of crypto assets.
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