Crypto Markets Have ‘Bottomed Out,’ Says JP Morgan, As Bitcoin Approaches $24,000

The expectation of the merger, a long-awaited upgrade of the Ethereum network, is the main factor behind the recent rally in cryptocurrencies, according to JP Morgan, which believes the market has bottomed out despite low trading volumes.

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

In a Monday note to clients, JPMorgan analyst Kenneth Worthington primarily attributed the changing economics of the cryptocurrency market to the planned Ethereum merger that will change the blockchain from proof-of-work (PoW) to proof-of-stake (PoS). .

Worthington said:

“What has helped, we think, has been a new, more limited contagion from the Terra/Luna implosion.”

Successful Ethereum Merger Is a Boon for Crypto Markets

However, the JPMorgan analyst believes the real push has been the integration of Ethereum and the favorable statistics following the introduction of the Sapolia and Ropsten testnets in early July and June, indicating that the merger is feasible in 2022. .

“Even though trading volumes remained low, it appears that cryptocurrency markets have found a bottom,” Worthington revealed.

JPMorgan stated that a successful unification of Ethereum later this year will help bolster investor confidence.

The integration is expected to occur in September, pending the performance of Georli’s next testnet. This test is scheduled for August 11 and is one of the final 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 sending positive vibes

The price of Bitcoin increased by 20% in July, while the price of Ethereum increased by approximately 60% compared to May, due to the encouraging news about the cryptocurrency’s switch from PoW to PoS; the system is meant to increase network speed and mining efficiency.

Additionally, JPMorgan noted 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 more than 60 percent from its all-time high of almost $68,000 in November of last year.

In July, decentralized finance was also up 22% with Worthington noting that:

“Given that DeFi tends to be built on Ethereum, the easing of initial concerns about DeFi and better news about the Ethereum merger are likely behind ETH’s exceptionally large price increase compared to bitcoin.”

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

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

Featured image from The Spruce, Chart from TradingView.com

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