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JPMorgan: Cryptocurrency Markets are ‘Looking Frothy.’

JPMorgan Says Cryptocurrency Markets Are ‘Looking Frothy’

Global investment bank JPMorgan says cryptocurrency markets are “looking frothy” as retail investors spill over from the stock market into cryptocurrencies and non-fungible tokens (NFTs).

Crypto Markets Look Frothy, According to JPMorgan

JPMorgan released Wednesday’s note on cryptocurrency and the stock market. It explains that retail investors bought stocks at a record pace over the summer with an estimated net flow into the U.S. stock market of $13 billion in August after reaching a record high of almost $16 billion in July.

The JPMorgan analysts stated that the stock-buying frenzy spilled into altcoins, non-fungible tokens, (NFTs), in August. This surge in NFTs, decentralized finance (defi), activity and NFTs has pushed up the price of some cryptocurrencies such as cardano, solana and ethereum.

They wrote:

Cryptocurrency markets [are] looking frothy again.

As Bitcoin.com News reported, the crypto market gained approximately 83% in value over the last three months, led by altcoins. Global crypto market cap currently stands at $2. 28 trillion. Bitcoin’s dominance slipped from 47% on Aug. 1 to 41. 39% Saturday. Ethereum (ETH) currently represents 20. 13% of the entire crypto market, followed by cardano (ADA) at 4.11%. Solana (SOL) represents 1.80%.

Solana is one of the most popular cryptocurrencies in 2018. At the price of $141. 04 per coin, SOL is now the seventh-largest crypto by market capitalization. The coin gained 310.8% during the last month and 3,277.6% year-to-date.

The JPMorgan analysts noted that altcoin trading now represents about 33% of the crypto market, emphasizing that it was a big increase from the 22% reading in early August. They concluded:

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.

What do you think about the comments by JPMorgan’s analysts? Please leave your comments below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. This article is not intended to be a solicitation or offer to buy or sell any products or services. Bitcoin.com does not provide investment, tax, legal, or accounting advice. The author and the company are not responsible for any loss or damage resulting from or in connection to the content, goods, or services discussed in this article.

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