JPMorgan pointed to the factors of the crypto market’s imminent recovery

Analysts noted the involvement of major players in containing the collapse and the steady inflow of venture capital investments into the industry

01.07.2022 - 07:25

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What’s new? Analysts at JPMorgan, a financial holding company, believe that the cryptocurrency market will soon hit the bottom, after which digital asset rates will begin to rise. According to experts, three factors point to this. Thus, major players, such as the FTX exchange, have begun to provide financial support to struggling companies amid the falling market. In addition, the industry is deleveraging, while venture capital investments, on the other hand, show a steady inflow — in May and June, the crypto sector attracted about $5 billion.

Material by Markets Insider

What else did analysts add? Despite the positive predictions, technical analyst Katie Stockton expects the negative indicators to persist for a few more months before a sustainable rebound can take form.

According to analysts, the market is in decline as the collapse of the Terra ecosystem has eroded investor confidence and triggered a wave of deleveraging. The deleveraging has also been influenced by miners, who have begun selling off their BTC holdings to settle on loans taken out to expand their businesses.

JPMorgan noted that companies that have used high leverage are in a vulnerable position and may not survive this crypto winter. One of these players was the well-known cryptocurrency hedge fund Three Arrows Capital (3AC) — on June 29, a court in the Virgin Islands ordered its liquidation. Earlier, crypto exchanges FTX, Deribit, and BitMEX liquidated the fund’s positions as it failed to settle margin calls.

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