JPMorgan Warns Big Investors Suddenly Throwing Bitcoin For Ethereum Amid $ 150 Billion Crypto Price Collapse

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Bitcoin and cryptocurrency prices fell sharply until September, proving the bears are right.

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The price of bitcoin is more than 15% lower than it started the month, with ethereum and other major cryptocurrencies declining even more. This week, China slumped bitcoin again after declaring all cryptocurrency-related financial activities illegal, wiping out $ 150 billion worth of the combined crypto market.

Ahead of China’s latest bitcoin and crypto crackdown, analysts at Wall Street giant JPMorgan

JPM
warned that large investors had started to shy away from bitcoin and ethereum futures amid “sharp divergence in demand.”

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“This is a setback for bitcoin and a reflection of weak demand from institutional investors who tend to use Chicago Mercantile Exchange (CME) regulated futures to gain exposure to bitcoin,” the analysts wrote in a report. customer rating first seen by Business intern, indicating that bitcoin futures on the CME are trading below the price of bitcoin in September.

Researchers have found that large investors are avoiding bitcoin futures, turning to ethereum instead as the number two cryptocurrency by value gains momentum thanks to the current craze for non-fungible tokens (NFT) and the expectations of decentralized ethereum-based finance (DeFi) will compete with traditional finance. Ethereum’s 21-day average term premium has risen to 1% against actual ether prices, according to CME data cited by JPMorgan.

“This indicates a much healthier demand for ethereum relative to bitcoin from institutional investors,” the analysts wrote.

Earlier this month, JPMorgan chief executive Nikolaos Panigirtzoglou said retail investors had taken small cryptocurrencies to unprecedented heights, with bitcoin’s market share now looking “uncomfortably low” by compared to historical standards and “make the cryptocurrency markets sparkling again”.

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JPMorgan is the latest in a growing string of crypto market watchers to praise Ethereum, with some going so far as to predict that Ethereum will eventually eclipse bitcoin.

“[Ethereum] is experiencing an explosion in developer activity thanks to NFTs and DeFi, ”Cathie Wood, chief executive officer of Ark Invest, said last week, revealing that her confidence in Ethereum“ has increased dramatically ”.

“I’m fascinated by what’s going on in DeFi, which is reducing the cost of financial services infrastructure in a way that I know the mainstream financial industry doesn’t like right now,” said Wood.

However, there is concern that the latest crypto crackdown in China may slow crypto adoption.

“China’s announcement of crypto trading ban sparked massive sell-off of bitcoins and other altcoins [and] could prove to be a drag on global crypto adoption, ”said Simon Peters, crypto asset analyst at brokerage eToro, in comments sent via email.


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