Analysts at JPMorgan led by Nikolaos Panigirtzoglou have warned that the digital currency industry is at risk of a potential downturn due to decreased demand for top assets like Bitcoin (BTC) and Ethereum (ETH). Bitcoin has dropped over 6% in the past month, and Ethereum nearly 18%. The total market value of digital currencies has also decreased from a record $3.72 trillion on December 17 to around $3.17 trillion. Analysts believe that Bitcoin and Ethereum futures contracts on the CME exchange are approaching a backwardation, indicating a lack of demand from institutional investors. They attribute this decline to profit-taking by institutional investors and reduced investment from momentum-based funds, but they suggest that the possible approval of new Exchange-Traded Funds (ETFs) could boost the market.
