Is JP Morgan Right About “Frothy” Crypto Market?
JP Morgan has speculated on another bearish phase after reviewing the extraordinary monthly US stocks collection. According to the bank, more and more retail investors have spent on US stocks over the summer of 2021. Furthermore, this wave of investment into stocks has also extended to “altcoins” in August, as investors joined the non-fungible tokens (NFTs) frenzy. But, according to JP Morgan analysts, the crypto market is looking “frothy” at the moment, indicating a bearing phase might be around the corner.
“Cryptocurrency markets [are] looking frothy again,” stated JPMorgan. The bank also emphasized that the altcoins market has experienced a massive surge from representing 22 percent of the cryptocurrency industry during early August to 33 percent at the beginning of September.
The rising NFTs and Defi popularity has impacted the price of smart contract cryptos, such as Solana, Binance Coin, and Cardano, while Ethereum’s alt-coin dominance stays untouched.
Top Altcoins in the CryptoMarket
Ethereum (ETH) maintains its dominance in the altcoin market, as it continues to display exceptional hikes and is trading numbers, staying well above the $3900 levels, with a weekly rise of 21.01 percent, at the time of reporting. CoinGape’s recent coverage also confirmed ETH’s bullish potential with positive on-chain activity and tripled miner balances in a month.
In the race of incorporating operational smart contracts, Solana is leading the charge in the seventh position, with a market cap of more than $41 Million, beating Dogecoin that stood at a little over $31M, at the time of reporting. Furthermore, at the time of writing Solana’s weekly surge amounted to 51.15 percent.
Cardano ($ADA) is another altcoin that has enjoyed a bull run instead of its upcoming Alonzo upgrade launch, scheduled to happen on September 12. Charles Hoskinson, the chief of Cardano updated the community, asserting that the upgrade is going as expected and will soon see a green signal for the launch. Cardano’s market cap is nearing $94 Million with a weekly rise of 3.22 percent at the time of print.
JP Morgan has also mentioned Binance’s native token, Binance Coin (BNB) in 2021’s successful altcoins. After BNB’s beer run in July instead of a regulatory crackdown, it reached a four-month high during late August at $520. At the time of reporting, BNB stood at the market cap of over $83 Million with a weekly rise of 3.80 percent, according to coinmarketcap.
“The share of altcoins looks rather elevated by historical standards and in our opinion, it is more likely to be a reflection of froth and retail investor ‘mania’ rather than a reflection of a structural uptrend,” JPMorgan concluded.