JPMorgan warns: crypto market enters difficult phase

Falling prices, lack of incentives: does the bull market? JPMorgan sees three major challenges in the coming weeks.

JPMorgan sees tough times ahead for crypto. That reports CNBC.

"With a lack of positive catalysts and declining retail momentum, we remain cautious for the crypto markets in the near term," the investment bank's analysts write.

The explosive growth of Bitcoin ETFs in the U.S. is slowing.

On May 1, they recorded record outflows of about $564 million after long weeks of purchases.

The BlackRock ETF has had no inflows for the past seven days.

The Bitcoin price has fallen nearly 10 percent since then.

On the other hand, the first Bitcoin ETFs were launched on April 30, 2024 launched in Hong Kong. On the first day of trading, they only generated inflows of about $87 million.

Overall, the bank's analysts see three main challenges for the market.

The market is exhausted, Bitcoin's valuation is very high compared to gold and production costs are expensive. Interest from retail investors is also waning. Institutional investors are taking profits.

Institutional investors are taking profits. They are reducing their positions in Bitcoin and gold because of new risk assessments.

In general, there is a lack of positive catalysts to stop the trend.

Bitcoin has risen about 30 percent since the beginning of the year.

By 2023, digital gold was up 156 percent, making it one of the best-performing assets in the world.

On Jan. 11, 2024, the first 11 Bitcoin spot ETFs were approved, leading to rising prices and euphoria.

The halving took place in April. This involves halving the rewards for miners who keep the network alive.

In the past, this has always caused the Bitcoin price to rise by hundreds of percent. Previous halves are therefore often correlated with a bull market.