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JPMorgan says cryptocurrency markets are ‘looking frothy’ with spike in retail demand at record pace

JPMorgan in April this year had said it is using the blockchain technology to improve funds transfers between banking institutions globally.

Global investment bank JPMorgan, which had reportedly started offering its wealth management clients access to cryptocurrency funds recently, has said cryptocurrency markets are “looking frothy” as the stock-buying frenzy among retail investors spilled over into altcoins and non-fungible tokens (NFTs) in August. In a note published earlier this week on the stock market and cryptocurrencies, JPMorgan noted that retail investors had purchased stocks at a record pace during the summer – almost $16 billion of record high net flow in July and around $13 billion in August into the US stock market, estimated by the investment bank, according to bitcoin.com. The crypto market value had gained around 83 per cent over the last three months, led by altcoins.

“Cryptocurrency markets [are] looking frothy again,” the note read. Bitcoin’s share in the overall crypto market cap had declined from 47 per cent on August 1 to 41.32 per cent on Sunday while Ethereum’s (ETH) grew slightly from 18 per cent to 20 per cent, followed by Cardano (ADA), Binance Coin, and Tether with respective share of 4.01 per cent, 3.62 per cent, and 2.91 per cent in total crypto market cap, as per Coinmarketcap. According to bitcoin.com, Solana has become among the top-performing coins this year. The crypto at the price of $141.04 per coin is now the seventh-largest cryptocurrency by market cap. The coin had market cap of $40.78 billion, at the time of filing this report. It had gained 310.8 per cent during the last month and 3,277.6 per cent year-to-date.

Also read: Bitcoin tops $50,000 again with 6% growth; Ethereum, Cardano, other coins also jump

According to the JPMorgan analysts, altcoin trading represented around 33 per cent of the crypto market currently, stressing about the growth from the 22 per cent in early August. “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 in April this year had said it is using the blockchain technology to improve funds transfers between banking institutions globally. The bank had launched ‘Confirm’ to help bring down the number of “rejected or returned transactions caused by mismatched payment details,” according to the investment banking company. As a result, the solution will lead to lowering costs for both the sending and receiving banks. Confirm is a global account information validation application on JPMorgan’s blockchain network through which partner banking institutions, according to the company, will be able to request confirmation of the beneficiary account information and receive responses directly from other participating banks receiving the requests in near-real-time.

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