JPMorgan’s Bitcoin Retail Sentiment Score Reaches Record High

Bitcoin (BTC) and everything related to cryptocurrencies have been incredibly active since Donald Trump won the US presidential election on November 5. Data tracked by JPMorgan and other analysts suggest things are getting crazy and investors should be wary of potential volatility.

JPMorgan’s retail sentiment score rose to 4 last week as BTC surpassed $93,000 and inflows into U.S.-listed spot ETFs and crypto stocks surged.

In a note to clients last week about the imbalance in retail transactions, JPMorgan wrote: “Following the election results, demand for Bitcoin ETFs gained additional strength (IBIT +3.4z). The demand for Bitcoin is also reflected in COIN (+6z). Sentiment scores of the Bitcoin family (both physical ETFs and others) reached a sigma high.”

A recorded z-score of 3.4 or higher indicates a significant, positive deviation from the mean, indicating strong demand.

With the developments, the options market tied to shares of Bitcoin-holding MicroStrategy (MSTR) rose to a record high, marking the trading frenzy often observed at market peaks.

The annual 25-delta put curve fell to -26.7% on Wednesday. This means that call options used to hedge against or profit from price rallies are trading at a significantly higher premium to put the bid on the downside, according to a chart from Market Chameleon shared by analyst Markets&Mayhem.

The curve rebounded slightly on Friday to -11.8% and continues to provide a fertile environment for upside bets.

While BTC and other crypto-related assets are solid investments in the long term, rising retail investor sentiment in the short term could become unpredictable and potentially lead to a sharp market reversal.