Demand For Crypto Traders Is Rising, Says JPMorgan – Coast Is Clear?
Analysts at JPMorgan now claim that optimism among individual cryptocurrency investors is on the rise, with a brighter market outlook after extreme downturns.
JPMorgan revealed in a survey published on Friday that it expects retail demand for cryptocurrencies to increase. The bank added that the severe deleveraging phase caused by falling digital currency prices and deleveraging by prominent lenders is also coming to an end.
After months of prolonged declines, the global cryptocurrency market capitalization has passed $1 trillion, with little progress. Accordingly, investors are closely watching the market for the next price movement.
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Crypto ‘Backwardation’ Has Ended?
JPMorgan stated that the significant “backward transition” experienced in May and June, the most extreme since 2018, appeared to be over.
In recent weeks, crypto markets have rebounded as investors anticipate Ethereum’s “Merge,” the blockchain’s Sept. 19 transition to a proof-of-stake (PoS) consensus process.
Image - Bitcoin.com
Bitcoin (BTC) and Ethereum (ETH) values have risen by 31% and 73%, respectively, since hitting record lows of $17,600 and $876 last month.
At the time of writing, Bitcoin is trading at $23,335, up 14% in the past seven days. Ethereum is trading at $1,631, climbing 37%, including in the past seven days, data from Coingecko showed on Friday.
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These advances are the result of an increase in optimism among bitcoin investors over the possibility of a slowdown in inflation and the health of consumer spending.
After last week’s statement that “Merge” would launch the mainnet in two months, investor expectations rose.
As the market capitalization of all digital currencies exceeded $1 trillion, the buying pressure surrounding the enthusiasm for the largest smart contract platform in the cryptocurrency industry spread to the rest of the market.
Crypto total market cap at $1.05 trillion on the daily chart | Source: TradingView.com
Crypto prices are also rising
In addition, the bank emphasized that the current market relief was not caused by futures or institutions. Thus, JP Morgan believes that retail demand for cryptocurrencies is increasing, causing token prices to rise as a result.
In addition, the bank observed that the resurgence of regular investors is reflected in the rising Bitcoin and Ethereum holdings of smaller wallets relative to whales. JPMorgan reported that Ethereum network traffic has increased in line with an improvement in investor sentiment.
The New York-based lender also pointed out that mining in hedged ether (stETH) is a strong indicator that the bearish event that destroyed crypto firms such as Terra, Celsius and Three Arrows Capital has ended.
The recent research provided by JPMorgan is a bright ray of hope in otherwise gloomy conditions, as macroeconomic fears of an impending recession cause anxiety in the sector.
Featured image from Times of India, chart from TradingView.com