JPMorgan sounds alarm on ‘frothy’ crypto markets after August boom

JPMorgan sounds alarm on ‘frothy’ crypto markets after August boom


Analysts from JPMorgan have raised concerns regarding altcoins making considerable gains in the total market share of cryptocurrencies.


About the trading boom witnessed in the month of August, JPMorgan’s analysts have come to warn their clients that the crypto markets are looking ‘frothy’ with the spot market trading volumes repeatedly topping $1 trillion. 


Markets Insider reported that JPMorgan had suggested to its clients that the valuations in cryptocurrency markets, including altcoins and NFTs, are getting too high. As per the suggestion, the share of altcoins looked elevated when compared to historical standards, making those look ‘frothy’ and instead of a reflection of “retail investor ‘mania’” than “a structural uptrend.”


 They also noted that altcoins were trading presently at about 33 per cent of the total crypto market, which is only 22 per cent higher than the beginning of August.


Although several crypto traders would be delighted at price increment, analysts believe that the apparent upward trend in interest won’t be substantial enough for maintaining for a more extended period of time.


The analyst also outlined the net flow of retail investments to US stocks, which was recorded at $13B through the month of August, inspired by Reddit’s day traders. A record high of $16B was recorded in July. They believed that the frenzy over buying had spilled due to NFTs and DeFis. Also, smart contract platforms including Solana, Cardano and Binance Coin were others that influenced the frenzy.


According to CoinMarketCap, spot investors have been responsible for pushing major altcoins like Cardano and Solana high above their all-time highs. For the first time, Cardano (ADA) had traded above $3 on September 3 and Solana (SOL) has been up by over 400 per cent since the beginning of August.


Bitcoin has also demonstrated tremendous strength by rallying back above the $50K mark for the first time since May, 2021.


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