JPMorgan, one of world’s biggest investment banks globally, has reiterated its negative outlook on the cryptocurrency market in a recent report. The bank expressed concern about the recent collapse of the $SI network, stating that it was “another setback for the crypto ecosystem.” As a result, shares of crypto-focused companies plummeted after Silvergate Capital announced its plan to wind down operations and voluntarily liquidate.
The decline in Silvergate Capital has impacted the price of Bitcoin, which dipped to an intraday low of $20,816 on the Bitstamp exchange.
Additionally, Coinbase’s stock dropped by nearly 1%, while Riot Blockchain and Marathon Digital, two leading crypto mining companies, saw their stock slide by 2.3% each.
JPMorgan has emphasized that replacing the instantaneous network for processing dollar deposits and withdrawals will be a difficult task, which poses a significant challenge to the cryptocurrency industry that heavily relies on fast and efficient payment processing networks.
The bank also highlighted the reversal in the CME futures spread, which is indicative of a deterioration in demand. This reversal could be interpreted as a signal that investors are less confident in the future of cryptocurrency. JPMorgan predicted that Bitcoin’s value could plummet to $13,000 by November.
Overall, JPMorgan’s report adds to the growing list of concerns about the future of cryptocurrency, including security breaches, regulatory risks, and lack of mainstream adoption. The industry will need to address these concerns to maintain its momentum and credibility in the market.
