JPMorgan CEO Jamie Dimon criticized Bitcoin for its potential involvement in illegal activities, also comparing it to a "pet rock". Despite this, JPMorgan is still involved in BlackRock's iShares Bitcoin ETF. Meanwhile, VanEck announced the liquidation of its Bitcoin Strategy ETF, pointing towards a number of reasons including performance and investor interest, while still maintaining its new VanEck Bitcoin Trust ETF.
On a different note, Bernstein released an analysis suggesting that Bitcoin mining stocks, despite recent underperformance, could be a good investment opportunity. Riot Platforms and CleanSpark were specifically identified as good options.
Jamie Dimon's Latest Take on Bitcoin
In an interview on CNBC from Davos, Jamie Dimon, the CEO of JPMorgan, once again expressed his critical stance towards Bitcoin (BTC). Despite acknowledging the right to invest in Bitcoin, Dimon advised against it, citing its potential use in illegal activities like money laundering, fraud, sex trafficking, and tax evasion. This statement aligns with his previous remarks made during a Congressional testimony to Senator Elizabeth Warren, where he suggested shutting down Bitcoin.
Dimon even went as far as to compare Bitcoin to a "pet rock," specifically pointing out its lack of functionality. However, his critique seems to be specifically targeted at Bitcoin, as he showed a more constructive attitude towards other cryptocurrencies. He acknowledged the potential of other digital currencies in applications like the tokenization of real assets.
The conversation also touched on the involvement of asset management firms like Fidelity and BlackRock in Bitcoin through spot ETFs. Despite Dimon's apparent disinterest in these developments, it's noteworthy that JPMorgan is playing a significant role in BlackRock's iShares Bitcoin ETF (IBIT) as an authorized participant. This involvement suggests a more nuanced stance of JPMorgan towards the broader cryptocurrency market, despite Dimon's personal reservations about the crypto king.
VanEck to Liquidate Bitcoin Strategy ETF
On the topic of ETFs, VanEck recently announced its decision to shut down and liquidate its Bitcoin Strategy ETF. This move comes less than two years after the fund's inception. Initially listed on the Cboe BZX Exchange in November of 2021, the Bitcoin Strategy ETF will undergo liquidation after receiving the approval from VanEck's board of trustees.
The decision was revealed on Jan. 17 and follows closely on the heels of the firm receiving the green light from the United States Securities and Exchange Commission (SEC) to list shares of its Spot Bitcoin ETF. VanEck pointed towards a number of reasons for this decision, including factors like fund performance, liquidity, assets under management, and overall investor interest, as well as operational considerations.
Despite this closure, VanEck reassures shareholders that they will have the opportunity to sell their shares of the Bitcoin Strategy ETF until Jan.30, with the fund expected to be completely delisted by Feb. 6. Meanwhile, VanEck's other Bitcoin-related offering, the VanEck Bitcoin Trust ETF (ticker HODL), has been trading on the Cboe BZX Exchange since Jan. 11. This ETF, along with other recently approved Spot Bitcoin ETFs, reportedly saw a great trading volume of about $4.5 billion on its very first day.
A recent report from CoinShares highlighted that inflows into U.S. crypto products for the week ending Jan. 12 surpassed those in other countries like Canada, Germany, and Sweden. This could be seen as a sign of growing interest and acceptance of crypto-based investment vehicles in the U.S. market.
Dormant Bitcoin Springs to Life
Spot Bitcoin ETF approval spurred others into making drastic moves as well. A huge number of dormant BTC tokens have recently been moved. Arkham Intelligence, a cryptocurrency tracker, reported that these Bitcoins have been largely inactive for the past 11 years.
According to Arkham's analysis, 49 bitcoin addresses were consolidated into five, resulting in the accumulation of approximately 49,858 BTC, valued at around $2.12 billion. This recent activity was only the third time these Bitcoins have been moved, with previous movements recorded in 2019 and 2013.
This latest big move has naturally attracted the attention of the crypto community, as movements of large BTC holdings can have visible implications for market dynamics and prices.
Bernstein's Guide to Bitcoin Mining Stocks
In other news related to Bitcoin, an analysis by brokerage firm Bernstein revealed that Bitcoin mining stocks, despite their recent underperformance, are a potential investment opportunity. The Valkyrie Bitcoin Miners ETF (WGMI), which focuses on publicly traded Bitcoin mining stocks, experienced a big decline of nearly 38% this year.
Bernstein identifies two primary challenges facing these mining stocks. Firstly, the approval of Spot Bitcoin ETFs reduced the attractiveness of mining stocks as a proxy investment for Bitcoin. Secondly, the fluctuating BTC price has contributed to the stocks' underperformance. However, Bernstein analysts Gautam Chhugani and Mahika Sapra see this downturn as a chance for investors to buy into these stocks at a much lower price.
The report suggests that, similar to the bitcoin market, the next two months could present a 'dip buying' opportunity for Bitcoin miners. Although there is an expectation of a temporary weakness in BTC potentially dropping to a short-term bottom in the $38,000-$42,000 range, the analysts advise investors to remain "structurally long" especially with the upcoming Bitcoin halving event in April.
In a separate note, Bernstein reaffirmed its optimistic opinion on Bitcoin miners, suggesting that these stocks could provide a more leveraged exposure to BTC. This is attributed to factors like EBITDA expansion and market multiple growth in a bullish cycle. Among the mining stocks, Bernstein particularly favors those rated as 'outperform', specifically pointing out Riot Platforms (RIOT) and CleanSpark (CLSK) as preferred choices.
