A new Bloomberg article dissected the report published by JP Morgan Chase analyst Josh Young. In his report, Young claimed that the cryptocurrency market has managed to remain afloat amidst all the confusion and political pressure. It should be noted that under the Biden administration, federal regulatory institutes like FINRA, SEC, IRS, and CFTC are all preparing to take the competition offered by the decentralized market out for good.
Just last week, SEC made a clear statement about not being in favor of a Bitcoin ETF any time soon. On the other hand, SEC chief Gary Gensler has said that crypto regulations are an inevitable reality on multiple occasions. At present, when Bitcoin dropped as low as 300% from its ATH last month, the analytics from Glassnode shows the institutional investors are busy buying the dip.
What is the Impression of Cryptocurrency among Traditional Financial Institutes after getting so much Volatility?
Bitcoin has gone down several times since rising to a record level in April, reaching $64,500. Under these circumstances, there is an increasing danger of huge financial institutions losing interest in them. However, it is more likely that these giants would have to make their next move to safeguard the billions of investments that they already have invested in cryptocurrencies.
In his report, Young shared a chart comparing the current and 2018 bull run price projections. According to him, it is very important to introduce a higher level of institutional engagement and investment to keep the crypto entering into a real bearish slope. He also claimed that the most visible spikes in volatility are noticed in the North American region.
Risky Altcoin Rise is Taking away Significant Profit Margins from the main Crypto Markets
Another important point added by Young in the report is that the forerunning cryptocurrencies like Bitcoin and Ethereum are facing a trending challenge from an increasing number of newer altcoins with fewer use cases. He also shared data projections to support his theories. The chart shared by young indicates that every downtrend in Bitcoin and Ethereum is facing an uptrend in the generic altcoin market.
According to him, the abrupt concentration of new altcoins and stablecoins every other day is not constructive for crypto. He also pointed out that the recent panic selling and increased liquidity amount can have a detrimental and long-term impact on the Bitcoin and Ethereum markets.