Floki Inu Soars to New Heights in the Cryptocurrency Market
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2022-05-09 | Selina Mathew
In a note issued on March 30, JP Morgan provided an overview of the current crypto scenario. Because of the recent reduction in the percentage of stablecoins relative to the whole crypto market, JP Morgan analyst Nikolaos Panigirtzoglou believes that crypto prices have limited upward potential. According to the bank analyst, stablecoins' percentage in the whole crypto market is not particularly significant, having dropped from 10% to below 7%. Stablecoins now have the same market share as they did in 2020.
Panigirtzoglou emphasized the following elements concerning the current crypto market phenomenon:
The expert feels that the cryptocurrency industry's recent comeback, which has occurred against bearish market trends for the last month, may be slowing.
Stablecoins' rapid collapse in the crypto industry as a whole might significantly restrict any future potential for crypto markets.
Stablecoins are viewed by JP Morgan as dry powder or cash on the sidelines that may be used to purchase various cryptocurrencies.
The bank stated that owing to the constraints of the existing banking system and the capacity of cryptocurrencies to overcome it, the sanctions placed on Russia during the Ukraine conflict are projected to enhance the use of cryptocurrencies significantly in the future.
The jump in Bitcoin and Ether prices was fueled by a mix of short covering and bitcoin fund inflows, with $210 million streaming into the Purpose Bitcoin ETF since March 7.
The bank's position proxy based on CME ethereum futures was pushed into overbought territory as short covering was greater for Ethereum.
Short covering is the practice of purchasing back borrowed securities to finish out an open short position profitably or at a loss.
Despite these changes, the bank feels that the recent drop in the percentage of stablecoins indicates a pause in the crypto market's ascent.
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