JPMorgan Says Cryptocurrency Markets Are ‘Looking Frothy’ After Summer Frenzy

According to the global investment bank, retail investors showed lot of interest in altcoins and NFTs in July and August.

By Edited by Gadgets 360 Newsdesk | Updated: 14 September 2021 11:54 IST

JPMorgan Says Cryptocurrency Markets Are ‘Looking Frothy’ After Summer Frenzy

The rise in the crypto market may be because of retail investors

Highlights

JPMorgan analysts say that the crypto market is looking frothy
It has also given wealth management clients access to crypto funds
It published a notice on the performance of the market in August

Analysts at global investment bank JPMorgan have said that cryptocurrency markets are “looking frothy” as the stock-buying frenzy during August spilled over into altcoins and non-fungible tokens (NFTs). The bank published a notice about the state of the market last month, noting that retail investors have been buying stocks at a record pace over the summer. According to Bitcoin.com, the bank estimated net flow to have reached $16 billion, a record high in July, followed by $13 billion in August in the US stock market. According to Financial Express, the last three months saw the crypto market gain 83 per cent. This was led by altcoins.

JPMorgan had recently given its wealth management clients access to cryptocurrency funds. In its note, the bank wrote, “Cryptocurrency markets (are) looking frothy again.” Indeed, the volatile nature of crypto came up once again as the valuation of altcoins and NFTs reached new highs.

Analysts noted that altcoin trading comprised 33 per cent of the crypto market currently. It's a distinct growth from the 22 per cent in early August.

On the other hand, Bitcoin's share in the overall crypto market saw a decline recently. The digital asset's share dipped from 47 per cent on August 1 to around 41 per cent on September 5. However, other coins like Ethereum (ETH) grew from 18 per cent to 20 per cent. Meanwhile, Cardano, Tether and Binance Coin held a share of 4.1 per cent, 2.9 per cent and 3.6 per cent, respectively.

According to JPMorgan, though altcoins look elevated by historical standards, the researchers feel that it could be a reflection of froth and retail investor ‘mania' instead of a structural uptrend.

However, analysts doubt if this increased interest for altcoin and NFT can be sustained for an extended period of time, Cointelegraph reported.

Earlier this year, JPMorgan began using blockchain technology to improve fund transfers globally. The investment bank launched “Confirm”, a global account information validation application. This application is based on JPMorgan's blockchain network.

According to the bank, “Confirm” would bring down rejected or returned transactions which are mainly caused due to mismatched payment details during transactions.

The bank called this a way to enable partner banking institutions to confirm the information of beneficiary account directly from other participating banks.

Cryptocurrency Prices across Indian exchanges

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.