Global investment bank JPMorgan Chase & Co. warned through Insider that people could expect further upside in crypto markets to be limited. Their projection came from the relationship of stablecoins and the rest of the crypto market.
Read CRYPTONEWSLAND onJPMorgan recognized the share of stablecoins in the total cryptocurrency market value as a sign of possible uptrend or declines. The firm said it “pointed to further upside” given that stablecoins accounted for 10% of the total crypto market cap. Moreover, the stablecoins’ share has returned to trend after its total crypto market cap has fallen 7% since 2020.
In the report published last week, JPMorgan analyst Panigirtzoglou said:
“The share of stablecoins in total crypto market cap no longer looks excessive and as a result we believe that any further upside for crypto markets from here would likely be more limited.”
A stablecoin is a class of cryptocurrencies that are pegged to a “stable” reserve asset. Popular examples include the US dollar and gold. These aim to lessen volatility relative to unpegged cryptocurrencies like bitcoin and other altcoins.
Panigirtzoglou commented that the price of cryptocurrencies has seen an uptrend in early March. This occurred after the West imposed financial sanctions on Russia.
The analyst added:
“These sanctions had raised expectations that cryptocurrencies will be used more extensively in the future to circumvent the traditional banking system given cryptocurrencies are not attached or depend on any government.”
Yet, JPMorgan warned that the uptrend in crypto markets might draw to its end. Specifically, this is based from the stablecoin share indicator.
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