Bitcoin May Plunge To $13k Amid Weakened Demand, Silvergate Collapse: JPMorgan
JPMorgan Chase & Co. is a multinational financial company based in the USA. It is the largest bank in the United States and the largest bank in the world by market capitalization. Although the bank made significant bets on cryptocurrencies, analysts at JPMorgan warned that the price of bitcoin could fall by another 25% in the wake of the FTX disaster.
Despite improving indicators of inflation and the global economy, financial services firm JP Morgan predicts that the US will face a recession later this year. According to the report, the recession will most likely begin in the second half of 2023.
The company appears to be sticking to its predictions. Read on!
Analysis of the JP Morgan report
In a recent tweet thread, American journalist Carl Quintanilla reported that JPMorgan had noted the recent collapse of the $SI, calling it yet another setback for the crypto ecosystem.
JPMorgan claims that it would be challenging to replace the immediate network for handling dollar deposits and withdrawals. Furthermore, it pointed to the opposite in the futures spread, which it saw as a sign of a slowdown in demand.
Along with a dim view on digital assets, the bank also said that before changing its mind, it needs to see progress in two crucial areas: the expansion of stablecoins and the rate of venture capital investment in the cryptocurrency market. The bank has a negative view of the market for digital assets, which suggests that the road to recovery may be difficult and long.
However, $SI has provoked heated discussion and debate among the cryptocurrency community, with some individuals expressing doubts about the long-term viability of digital assets, while others continue to be optimistic about its potential for advancement.
The Silvergate fiasco
Silvergate Bank, an MVP of the crypto industry, has announced its closure and refund of deposits. The bank cited the latest developments in the sector and in regulations as reasons for the decision to close.
A pillar of the cryptocurrency industry, Silvergate Bank, has announced that it is closing and returning deposits. The bank cited the latest developments in the sector and in regulations as reasons for the decision to close. Shares of companies involved in the cryptocurrency industry fell on Thursday, after the bank’s collapse triggered a crisis of confidence in the sector. Shares in Silvergate plunged 26%, while rival Signature Bank and former Silvergate partner Coinbase Global Inc. were both down 8%.
The current price of bitcoin is at $19,838 with a market cap of $383,139,446,276.
As a result of the revelation that cryptocurrency-friendly bank Silvergate Capital (SI) was winding down, cryptocurrency investors lost around $307 million. Events like this raise the possibility that JP Morgan’s predictions of a recession this year will actually come true.
