The cryptocurrency market is currently in the consolidation phase. As Bitcoin (BTC) moves sideways above $20,000, banking giant JPMorgan says the negative sentiment about the cryptocurrency market is not over now. The bank’s analysts have issued warning signals pointing to a longer crypto decline. Here are the details…
JPMorgan talks about lack of funds in Bitcoin and altcoin space
On Thursday, JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou said that financing in the crypto space operates on a scale of $10 billion per year. That’s one-third of the face seen last year. Also, in the third quarter of this year, the financing of venture capitalists in the cryptocurrency space fell to $4.4 billion. Amid fiscal tightening and other macro factors, demand for riskier assets declined significantly. The group at JPMorgan wrote:
This shows the reluctance of venture capitalists to pour capital into the crypto-asset space. It also increases the likelihood that the current weakness in the crypto markets is long-term. An alarming development.
On Thursday, November 3, crypto exchange Coinbase also reported its third-quarter earnings with a net loss of $545 million. The company said its process revenue was strongly impacted by the macro headwinds and the crypto market correction. Coinbase also stated that it does not expect the crypto market to recover quickly from current levels. On Thursday, the COIN stock price fell 8 percent. Over the past year, the COIN share price has lost 85 percent.
JPMorgan is committed to consumer advocacy
In another development, JPMorgan said banks will have to prioritize consumer protection as they begin experiments with crypto. Recently, banks have been approaching the crypto industry to make their financial services more affordable and efficient. However, appropriate security measures are in place to protect investors from cybersecurity risks. Meanwhile, the banking giant uses a so-called “verifiable collections” solution that stays in the client’s Blockchain wallet. In addition, the bank recently conducted a valuable trial for decentralized finance (DeFi).
JPM experimented with DeFi
Koindeks.com As we reported, JP Morgan completed its first decentralized finance (DeFi) on-blockchain cross-border process on November 2. It is a segment of Project Guardian, launched by the Monetary Authority of Singapore (MAS), the central bank of Singapore. The process was completed on the Polygon network using a modified version of the smart contract code of the AAVE protocol. In the process, there was a tokenized version of the Singapore Dollar (SGD) and Japanese Yen (JPY). It involved a simulated trading process of tokenized government bonds.