JPMorgan Warns of A Long Slump In The Crypto Markets! Here’s What You Should Know

JP Morgan: Highlighting The Red Indicators

Recent opinions by expert analysts have noted the rapid depletion of venture capital in the cryptocurrency market. JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou said on Thursday that annual funding for the cryptocurrency industry is at the $10 billion mark, which is only a third of the previous year’s rate.

Venture capital funding for cryptocurrencies hit a record low of $4.4 billion during the third quarter of this year. As a result of macro variables like monetary tightening, investors have lost interest in risky assets because they do not want to lose more money than they already have. 

The JPMorgan team published the following report:

The current weakness in crypto markets is likely to persist if this trend continues, as it demonstrates a reluctance by VC funds to commit resources to the digital-asset area.

The cryptocurrency exchange Coinbase also released its quarterly numbers on November 3rd, revealing a net loss of $545 million. The company reported that macro headwinds, as well as the correction in the crypto market, had a significant impact on their transaction revenue.

Besides that, Coinbase also added that it does not anticipate a rapid recovery of the cryptocurrency market from present levels. Thursday’s trading session saw the price of COIN shares down another 8% to a final value of $55.80. The COIN share price has dropped by around 85% from the past year.

JPMorgan’s Approach to Consumer Safety

In addition, JPMorgan stated that banks must put safety and compliance first when experimenting with cryptocurrencies. Recently, banks have been getting closer to the crypto business to improve the accessibility and efficiency of their financial services and bridge the gap between traditional financial institutions and new-age assets. 

That being said, adequate safety measures are crucial to protect investors from cyber threats. Umar Farooq, CEO of JPMorgan’s blockchain unit Onyx, made the following remarks this week at the Singapore Fintech Festival 2022:

“From both a regulatory and a customer’s perspective, it is essential that banks take measures to safeguard their clients’ financial information. We can’t afford to waste any of their capital”

The financial behemoth is working on this via verified collections technology, which would reside in the client’s blockchain wallet. Each time a user transacts over the protocol, their identity is checked.

The bottom line

While in conversation with CNBC, Farooq said, “He can’t imagine people being able to send money across borders if no one checks and no one knows who’s giving money to who, because sooner or later they will be in a money laundering issue.”

Given the state of the world, it’s safe to say that the cryptocurrency community as a whole is reevaluating whether or not altcoins represent a secure investment. This could prove beneficial for investors who put their hard-earned money in such assets with the hope of impressive returns but often end up losing it.