By Richard Hines
In recent times, crypto market capitalization has risen in performance, exceeding $1 trillion, which is still a far cry from its $3 trillion all time high. JP Morgan warns about an even dipper dip in coming days.
JP Morgan Predicts Impending Dip
JP Morgan, the crypto banking giant, has advised investors to be extremely careful during this period, believing that the rapid flow of funds could lead to an even deeper downturn in the crypto market.
According to figures acquired, JP Morgan’s strategist Nikoloas Panigirtzoglou highlighted the expenses the crypto market is running on. He began by stating that the market is currently operating at a rate of $10 billion per year, which is a one-third of last year’s.
Also, Venture Capital hit a low of $4.4 billion in crypto fundraising during the third quarter of the year—down from previous year. Due to caution and other considerations, the demand for riskier assets for profit and investment has significantly decreased—everyone is now playing it safe in the market.
Given the situation with Venture Capital funds, the JPMorgan team expressed great concern. If the hesitation to deploy assets into the crypto space persists, we will witness a longer-lasting vulnerability and weakness in the crypto market.
Coinbase reported its third-quarter earnings on November 3rd, and they were significantly lower than last year. It recorded a $545 million net loss, which it attributed to the impact of the market crash on its transaction revenue as well as the impact of the crypto market correction on the exchange.
It also dismissed any expectations of a quick surge, adding that it does not expect the crypto market to recover from present levels. On Thursday, the coin’s stock price fell another 8%, finishing at $55.80. Over a year period, the coin underwent an 85% crypto market correction.
Banks Should Prioritize Consumers
JP Morgan has stressed the significance of consumer protection, stating that banks should prioritize putting consumers first before embarking on any cryptocurrency-related experiment. It is apparent that banks have been leaning towards the crypto business in recent days to help improve seamless transactions and more economical and efficient services.
However, effective security measures should be implemented and followed in order to protect customer funds from cyber attacks, which are becoming increasingly common in the crypto industry. According to Umar Farooq, CEO of JP Morgan Blockchain, who spoke at the Singapore Fintech Festival, anything a bank decides to do from a regulatory and customer standpoint should all prioritize consumer safety. “We can’t afford to lose their money.”
To further assure consumer security, banks are attempting to implement a system known as verifiable collections, which would remain in the user’s blockchain wallet and would be used to verify their credentials whenever the consumer initiates a trade.