Bitcoin has to endure and overcome the $40,000 boundary in order to avoid a consequent major price correction. JPMorgan strategists say that otherwise, the major cryptocurrency might suffer investment outflow.

The $40K Is the Key to Future Prospects for BTC

According to a JPMorgan Chase & Co report, cited by Bloomberg, this level is an omen to more eventual losses.

The major financial institution strategists led by Nikolaos Panigirtzoglou said that the cryptocurrency is at risk of further losses and an outflow of trend-following investors unless it can “break out” over the $40K frontier. The team added that the pattern of demand for BTC futures and the $22.9 billion Grayscale Bitcoin Trust might help determine the perspective.

“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout to occur,” the strategists commented on Friday.

After a record-breaking hit near $42K in the first week of January, Bitcoin suffered a significant price correction with almost $12K in just a short time, leaving investors pondering the reasons. JPM strategists said that the primary cryptocurrency has been in a similar situation last November when it passed the $20,000 test.

Furthermore, a significant flow of institutional money entering the Grayscale trust has encouraged the BTC rally claimed, JPM specialists. They’ve also noted that trend-following traders “could propagate the past week’s correction” and “momentum signals will naturally decay from here up till the end of March” if BTC price doesn’t break the $40,000 milestone.

Breaking the $40K Limit and Replacing Gold?

Amidst both volatile behavior and opinions on BTC, recently, JPMorgan shared another possible Bitcoin scenario. As CryptoPotato reported, analysts from the financial institution have claimed that the cryptocurrency has taken portions of gold’s market share which could lead to price losses for the bullion.

Back then, strategists said that institutional investors had shown significant transfers from gold ETFs to bitcoin, thus suggesting adverse price developments for the noble metal.

Both bitcoin and gold have one thing in common – their rather limited supply – which had encouraged investors to think that the digital asset might replace the precious metal to an extent in the future.

Analysts said that since October, “money has poured into Bitcoin funds and out of gold, a trend that’s only going to continue in the long run as more institutional investors take a position in cryptocurrencies.” Still, the bold suggestions remain more of a speculation, while BTC remains quite volatile.

The legal battle comes as the Aussie man allegedly suffered significant losses in his crypto business after the banks, Westpac and ANZ, shut down his accounts, local media reported Monday.

According to the proceedings filed at the ACT Civil and Administrative Tribunal, Allan Flynn alleged that the banks’ action was illegal as they closed his accounts without any prior warning or reason.  

20 Accounts Closed In Three Years

Flynn owns an AUSTRAC-registered crypto exchange with about 450 customers. Using the platform, he helps his clients to purchase crypto assets like Bitcoin.

The Australian Financial Review revealed that the complainant has had about 20 of his accounts shut down in the last three years by more than five Australian banks, including CBA, NAB, ING, and Bendigo Bank, to mention a few.

Following the continued account closures, Flynn said he opened new accounts with Westpac and ANZ while informing the banks that the account was for crypto transactions. But both accounts were closed after almost a year of running them. He said he received a message from Westpac saying his account would be closed in five days. His effort to open another account with Westpac was not successful.

He requested to know why his account was closed and why he couldn’t open a new one, and the bank told him that he was “under investigation for cryptocurrency fraud.”

Flynn said Westpac offered him a compensation of AUD$250 for not providing “reasonable notice” before closing the account. However, he hasn’t “seen a cent of it either.”

Not The Only One

For one thing, cryptocurrencies and exchanges are legal in Australia, and there’s no law prohibiting banks from rendering services to crypto traders. However, Flynn noted that he is not the only victim of this unlawful discrimination. 

“I am by no means alone or the first. I know of at least one other trader who has had accounts closed more than 60 times,” he said, adding that “how am I supposed to run a lawful business if I can’t get a bank account?”

According to the report, Flynn demands a total settlement of AUD$375,000 from the banks, with the hearing expected to take place in late March. 

He is seeking AUD$250,000 for stress and inconvenience and AUD$125,000 for emotional distress and reputational damage. Aside from closing his accounts, Flynn alleged that an ANZ employee informed other banks and his clients that he was fraudulent.