Crypto Markets Have “Hit Bottom,” Says JP Morgan, As Bitcoin Approaches $24,000

The anticipation of the merger, a long-awaited improvement to the Ethereum network, is the main factor behind the recent cryptocurrency rebound, according to JP Morgan, which believes the market has found its bottom despite low trading volumes.

Bitcoin (BTC) and Ether (ETH) are up 35% and 101%, respectively, since their mid-June lows, and the overall cryptocurrency market value has regained $1 trillion, according to data from CoinMarketCap.

In a note to clients on Monday, JPMorgan analyst Kenneth Worthington attributed the economic developments in the cryptocurrency market primarily to the planned Ethereum merger that will take the blockchain from Proof-of-Work ( PoW) to Proof-of-Stake (PoS).

worthington said:

“What we think helped was further, more limited contagion from the Terra/Luna implosion.”

Successful Ethereum Merger Is A Boon For Crypto Markets

Nevertheless, the JPMorgan analyst believes the real impetus was the integration of Ethereum and favorable statistics following the unveiling of the Sapolia and Ropsten testnets in early July and June, indicating that the merger is feasible in 2022.

“Although trading volumes remain down, it looks like cryptocurrency markets have bottomed out,” Worthington revealed.

JPMorgan said a successful Ethereum unification later this year will help boost investor confidence.

The integration should take place in September, pending the performance of the next Georli testnet. This test is due to take place on August 11 and is one of the last steps before the merger.

Ethereum's successful integration later this year, according to JPMorgan, is expected to help boost investor confidence. Image: Analytics Insight

PoW to PoS Send positive wave

Bitcoin price rose 20% in July, while Ethereum price rose around 60% from May, following encouraging news about the cryptocurrency’s shift from PoW to PoS; the system is intended to increase network speed and mining efficiency.

Additionally, JPMorgan observed that Bitcoin and Ethereum’s ability to rise from June lows is another indication that the market has bottomed. The price of Bitcoin has fallen over 60% since its all-time high of nearly $68,000 in November last year.

In July, decentralized finance also grew by 22%, and Worthington pointed out that:

“Given that DeFi tends to be built on Ethereum, the alleviation of early DeFi concerns and better news about the Ethereum merger are likely behind the unusually large price rally of ETH against bitcoin. .”

As crypto investors seek a much-needed boost of confidence, the long-term revival of the cryptocurrency market may hinge on the impending Ethereum merger.

BTC total market cap at $444.9 billion on the daily chart | Source: TradingView.com

Featured image from The Spruce, Chart from TradingView.com

Leave a Comment

Your email address will not be published.