Crypto Markets Look Frothy, According to JPMorgan

Global investment bank JPMorgan says cryptocurrency markets are looking frothy as retail investors spill over from the exchange into Crypto
Global investment bank JPMorgan says cryptocurrency markets are looking frothy as retail investors spill over from the exchange into Crypto

Global investment bank JPMorgan says Crypto markets are “looking frothy” as retail investors spill over from the exchange into Crypto and non-fungible tokens (NFTs).

Crypto Markets Look Frothy, consistent with JPMorgan

JPMorgan published a note Wednesday on the exchange and cryptocurrencies. It explains that retail investors bought stocks at a record pace over the summer with an estimated net flow into the U.S. securities market of $13 billion in August after reaching a record high of virtually $16 billion in July.

The JPMorgan analysts asserted that the stock-buying frenzy spilled over into altcoins and non-fungible tokens (NFTs) in August, and therefore the surge in NFTs and decentralized finance (defi) activity has boosted the worth of certain cryptocurrencies, like ethereum, solana, and cardano.

JPMorgan wrote:

Cryptocurrency markets [are] looking frothy again.

Cryptocurrency market gained about 80% in price over the last three months, mostly price increase led by altcoins. The world crypto market cap is currently $2.28 trillion. Bitcoin’s dominance slipped from 47% on Aug. 1 to 41.39% Saturday. Ethereum Ether at the moment represents more than 20% of the complete crypto market cap, followed by Cardano ADA at more than 4% rate of coin market cap. Solana (SOL) represents almost 2%.

Solana has become one amongst the top-performing cryptocurrencies this year. At the value of $141.04 per coin, SOL is now the seventh-largest crypto by capitalisation. The coin gained 310.8% during the last month and three,277.6% year-to-date.

The JPMorgan analysts noted that altcoin trading now represents about 33% of the crypto market, emphasizing that it absolutely was a giant increase from the 22% reading in early August. They concluded:

The share of altcoins looks rather elevated by historical standards and in our opinion it is more likely to be a reflection of froth and retail investor ‘mania’ rather than a reflection of a structural uptrend