The cryptocurrency craze has motivated thousands of businesses around the world to accept these digital assets as payment and has attracted millions of investors across the globe. However, a recent study by JPMorgan Chase highlights the marked slowdown in demand for cryptocurrencies as a means of payment. Is this the end of the craze for bitcoin, ether, dogecoin and shiba inu to name but a few examples?
The causes of the fall of the cryptocurrency market
JPMorgan, one of the most famous American banks, has confirmed that the fall in the cryptocurrency market and bitcoin in particular is likely to continue.
Indeed Takis Georgakopoulos head of global payments at JPMorgan Chase & Co recently shared an analysis presenting an overview of the situation of the last six months of the crypto market.
He thus pointed out that cryptocurrencies have aroused a lot of curiosity among investors, especially in 2021, but that there has been a marked slowdown in demand on the virtual currency market for several months.
This poor macroeconomic situation can be explained by several factors according to Takis Georgakopoulos. The first is the conflict in Ukraine, record inflation in the United States and the energy crisis in Europe.
The second is linked to central banks which have raised their interest rates several times. This had a direct impact on financial markets at large (within centralized and decentralized finance).
The end of an accommodating monetary policy for many years on the part of the Fed has impacted Wall Street and the stock markets Europeans, which have fallen sharply.
This has also had an impact on other asset classes like cryptocurrencies which have benefited from favorable central bank monetary policies since the end of the 2018 financial crisis.
The third is a phenomenon very specific to cryptocurrencies. Indeed, a large South Korean project has literally exploded in midair, partly due to the crash of the crypto market.
The project in question is Earth (MOON)which in turn led to an even steeper drop in the cryptocurrency market.
In addition, the crypto bear market has a negative impact on the psychology of investors, which explains why crypto-currencies such as bitcoin and ether, for example, are struggling to regain their highest level.
For the moment, the most confident continue to keep their coins et tokens where other traders and investors resell part of their digital assets to bail themselves out.
Despite this pessimism surrounding the cryptocurrency market, banking giant JPMorgan says it will continue to offer cryptocurrency financial services.
We also note that JPMorgan has declared that the decline in the crypto market and bitcoin (BTC) in particular could only be temporary.
It is in the latest report from Bloomberg that analysts at JPMorgan put forward an optimistic forecast for cryptocurrencies and bitcoin in the long term. The future will tell if they were right.
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