JPMorgan’s analysts have warned that there is a risk of the crypto-industry experiencing a downswing due to dwindling demand for high value assets, such as Bitcoin or Ethereum. BTC, the largest cryptocurrency by market capitalization, has dropped over 6% within the past 30 days. ETH is down nearly 18%. Although the markets are bullish, so far not all cryptocurrencies have reached 2025 levels. JPMorgan is concerned that the crypto boom of 2025 may not be as strong as expected.
Total crypto market capital has fallen by 15 % from the record high reached on December 17 of $3.72 Trillion to $3.17 Trillion, which is a major correction. JPMorgan analyst Nikolaos Pagirtzoglou says that the lack of catalysts for positive growth and declining momentum are factors driving the lower demand in crypto futures. CME Bitcoin and Ether futures have reached their limit. “backwardation”The analysts noted that the futures price is below current spot prices in June and July of last year.
“This is a negative development and indicative of demand weakness by those institutional investors that use regulated CME futures contracts to gain exposure into these two cryptocurrencies,” Analysts added to the report. The prices of the top coins have also been affected by the decline in demand for crypto-futures investments. Two factors are attributed by analysts to the declining demand of CME bitcoin futures and ether.
JPMorgan Reveals Why the Crypto Bear Market is Existing
To begin with, it appears that some institutional investors have taken profits because there are no immediate catalysts for growth. Analysts say that the U.S. new administration is unlikely to launch major initiatives related to crypto before the end of the year. Investors are left in uncertainty. Second, funds that are driven by momentum, such as commodity traders, have reduced their exposure to the market, which has further dampened demand. “Both Bitcoin and Ethereum momentum signals have been downshifting over the past couple of months with the Ethereum momentum signal having shifted already into negative territory,” The report says that.
Also Read: Cryptocurrency: 3 Coins To Hold That Are In Queue To Be Launched As ETFs
The crypto market is under pressure to meet expectations after years of high optimism. However, the top assets are not likely to be able stand up to the expectation. Analysts at JPMorgan are concerned that the crypto market may not be booming but instead start showing cracks. This pressure is also not expected to decrease in the next few months. “altcoin season” Period is coming in March.
A new crop of crypto-ETFs that are expected to be released this year may give the sector a boost it desperately needs. In 2024 the spot Bitcoin/Ethereum exchange-traded funds (ETFs) launched, and the entire market saw a surge. This could happen this year if assets such as XRP or Litecoin ETF Approval
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Source: watcher.guru
