JPMorgan Strategist: Crypto Deleveraging Is Coming To An End

A JPMorgan strategist predicted that the worst of the bear market is coming to an end since stronger crypto companies started to bail out the industry in the middle of its deleveraging so let’s read more today in our latest cryptocurrency news.

The historic deleveraging of the crypto marekt could be coming to an end which signals a close of the orse for the bear market according to the JPMorgan strategist Nikolaos Panigirtzogolou who outlined an increased willingness of companies to bail out other companies and a healthy pace of venture capital funding showing the basis for optimism. He said key indicators support this assessment:

“Indicators like our Net Leverage metric suggest that deleveraging is already well advanced.”

The deleveraging of the major crypto companies where their assets were sold in a rush or willingly, started in May when the Terra ecosystem collapsed and erased billions of dollars but since then, the lenders Blockfi and Celsius crashed into problems. The analyst added that the severity of the deleveraging of the crypto companies could be severe and could suggest the tremors from this year’s market collpase could continue to reverberate.

However, the analyst argued that the deleveraging could be coming to an end with some crypto entities stepping in to bail out other struggling companies:

“The fact that crypto entities with the stronger balance sheets are currently stepping in to help contain the contagion.”

Amid the calamities of several blockchain companies like Celsius and Three Arrows Capital, FTX is in a position to expand its influence on the industry and the rumors are saying that the exchange offered to buy blockfi for $25 million. However, the BlockFI CEO denied the rumors. Panigirtzoglou also saw the healthy pace of venture capital funding on the crypto marekt as a good sign. As per JPMorgan’s estimates, there’s about $5 billion in VC funding to crypto companies and the fundraising metrics tracker Dove Metrics also shows that crypto funding is getting higher. The rate of funding is down by $2.2 billion but still up $3.4 billion between May and June 2021.

The latest predictions from JPMorgan should bring a blow of fresh air into the hearts of investors who endured what was possibly the worst bear market in the history of crypto trading.