Bitcoin News and Finance JPMorgan Expects Crypto Market to Face Weeks of Deleveraging – Warns Bitcoin Price Could Drop to $13K Skip to main content

JPMorgan Expects Crypto Market to Face Weeks of Deleveraging – Warns Bitcoin Price Could Drop to $13K

JPMorgan Expects Crypto Markets to Face Weeks of Deleveraging – Predicts Bitcoin Price Could Drop to $13K

Global investment bank JPMorgan has warned of the crypto market facing weeks of deleveraging stemming from the crisis at Sam Bankman-Fried’s crypto exchange FTX.com and trading platform Alameda Research. The firm’s analysts also predicted that the price of bitcoin could fall to $13,000.

JPMorgan on FTX and Bitcoin’s Price

JPMorgan Chase’s analysts, led by global market strategist Nikolaos Panigirtzoglou, provided their analysis of the FTX situation and a price prediction for bitcoin in a note Thursday.

The analysts explained that fewer players in the crypto space are now able to rescue weaker players, stating:

What makes this new phase of crypto deleveraging induced by the apparent collapse of Alameda Research and FTX more problematic is that the number of entities with stronger balance sheets able to rescue those with low capital and high leverage is shrinking.

Facing a liquidity crunch, FTX CEO Sam Bankman-Fried reportedly asked several major crypto exchanges, including Coinbase and Okx, for help. When they turned him down, he approached Binance despite CEO Changpeng Zhao (CZ) stating that his exchange is dumping all of the FTX tokens (FTT) on its books. Binance originally said it would acquire FTX and provide liquidity but after due diligence, the exchange walked away from the deal.

Crypto investors are concerned about the solvency of FTX.com and trading house Alameda Research. Bankman-Fried, who founded both firms, reportedly told FTX.com investors that his company needs a cash injection to avoid having to file for bankruptcy.

JPMorgan cautioned that a “cascade of margin calls” is likely underway given the interplay between FTX.com, Alameda Research, and the rest of the crypto ecosystem.

The global investment bank warned that the crypto market could face weeks of deleveraging stemming from the crisis at FTX, noting that a period of upheaval could drive the price of BTC down to $13K.

JPMorgan’s analysts use bitcoin’s production cost as a way of calibrating how much further the price of BTC can fall. They detailed:

At the moment, this production cost stands at $15,000, but it is likely to revisit the $13,000 low seen over the summer months.

At the time of writing, BTC is trading at $17,602, up 11% in the last 24 hours but down13% in the past seven days.

What do you think about the warnings and predictions by JPMorgan’s analysts? Let us know in the comments section below.

Comments

Popular posts from this blog

Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl...

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

Last week, the game token leveraged within the Axie Infinity gaming universe skyrocketed to all-time highs, while other crypto markets remained extremely lackluster. During the last seven days, Axie Infinity’s platform token has dropped significantly in value shedding more than 12%. Meanwhile, the game platform’s smooth love potion token has slid over 8% over the last 24 hours. Axie Infinity Down More Than 40% Since All-Time High Not too long ago, the axie infinity (AXS) token was a topical conversation because it reached an all-time high on July 15. At the time, AXS managed to capture $28.93 per unit and since then it has shed 12.8% during the last seven days. The axie infinity (AXS) token is used within the blockchain-based game that involves battles between token-based creatures called “Axies.” AXS is used for the game’s governance system as well as other actions within the game. At the time of writing axie infinity (AXS) is exchanging hands for $16.70 per coin. AXS/USD on Ju...

Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and...

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r...
Blogarama - Blog Directory