Financial strategists at investment banking firm JPMorgan Chase & Co say the ongoing bear market has reached an advanced stage. Therefore, they are confident that the Bitcoin and altcoin decline will end soon. Here are the details…
JPMorgan strategists comment on the current state of Bitcoin and altcoins
The note, written by JPMorgan strategists, including Bloomberg’s Nikolaos Panigirtzoglou, contained positive comments on the crypto space. Analysts think that the decline of the cryptocurrency market in the past months is a manifestation of the process of reducing leveraged positions. The good news is that JPMorgan strategists anticipate that the ongoing cycle of cryptocurrency removals may not last long, after the increasing amounts of bailout funds have been given to companies that have been heavily impacted by the market downturn. Strategists use the following phrases:
Crypto companies with stronger balance sheets are now stepping in to take control of the situation. Therefore, the current leverage reduction cycle may not be very long.
Venture capital funding, an important source of capital for the crypto industry, also continued at a healthy pace between May and June, according to JPMorgan strategists. For example, FTX has given loans to cryptocurrency companies. The stock market is making moves to buy some firms that have been heavily impacted by the ongoing market crisis.
Troubles in the cryptocurrency market
Cryptocurrency-related businesses have been heavily impacted by a number of events. Some companies had to take very strict measures, such as staff layoffs and liquidation. This has been known for some time already. The cryptocurrency market has been hit hard in February and March, following the Russian invasion of Ukraine and the US Federal Reserve’s (FED) move to curb rising inflation by raising interest rates.
Crypto companies were struggling to survive amid these unfortunate events. However, Terra ecosystem tokens LUNA and UST collapsed tremendously. As cryptokoin.com reported, this was an event that shook the entire crypto market. Terra’s collapse in May resulted in the failure of Three Arrow Capital (3AC), which had a significant investment in Terra and is currently facing liquidation. Popular crypto lending platform Celsius Network had to stop users from withdrawing, swapping and transferring their assets after the crypto market crashed.
Also, crypto companies such as Coinbase, Crypto.com, and Gemini have had to reduce their headcount to cope with the market drop. JPMorgan strategists are of the opinion that the cryptocurrency market has moved beyond a good portion of the current bear market problems. They add that it is only a matter of time before the prices of altcoins such as Bitcoin and Ethereum, Dogecoin, Shiba Inu, ADA, SOL, AVAX rise again.
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