Financial services giant JPMorgan says the latest Bitcoin (BTC) and crypto market meltdown may be fleeting.
According to a new BNN Bloomberg report, JPMorgan analysts say the crypto market’s current deleveraging trend may not last much longer.
The analysts also suggest that crypto firms going under shouldn’t be a surprise given the falling prices of digital assets.
The strategists say the latest crisis at Three Arrows Capital, which saw regulators from the British Virgin Islands recently mandate its liquidation, was “a manifestation of this deleveraging process.”
Though many crypto assets such as Terra and Celsius have recently collapsed in the past few months, the JPMorgan strategists say crypto entities and venture capitalists are stepping in to “contain the contagion,” which should shorten the crypto bear market.
JPMorgan cites crypto exchange platform FTX as an example with the firm recently granting credit lines to embattled crypto projects as well as considering acquiring them outright.
According to FTX CEO Sam Bankman-Fried, the main driver of the crypto market crash has been the Federal Reserve’s policies.
In a new interview with NPR, Bankman-Fried says the Federal Reserve aggressively raising interest rates to combat inflation is the reason for the downfall of the crypto industry.
“The core driver of this has been the Fed… literally markets are scared. People with money are scared.”
Bankman-Fried then says he feels he has a responsibility to stop the bleeding.
“I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion. Even if we weren’t the ones who caused it, or weren’t involved in it. I think that’s what’s healthy for the ecosystem, and I want to do what can help it grow and thrive.”
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