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Crypto Has Limited Upside Due To Dip In Stablecoins, Bitcoin Falls Says JP Morgan
According to JP Morgan analyst Nikolaos Panigirtzoglou, crypto prices have limited upside due to the recent reduction in the percentage of stablecoins relative to the whole crypto market.
Himanshu S.
3:04 9th May, 2022
Altcoins

According to the bank analyst, the percentage of stablecoins in the whole crypto market is not significant, having dropped from 10 per cent to less than 7 per cent. The current stablecoin share is the same as it was in 2020.

The current comeback in the cryptocurrency market under the prevailing negative market characteristics for the last month may slow down.

•    The rapid decline of stablecoins in the cryptocurrency market as a whole may severely limit any future rise in crypto markets.

•    JP Morgan regards stablecoins as "dry powder" or "spare currency" that could be used to purchase various cryptocurrencies.

Furthermore, high-profile hacks on crypto "bridges"— which let users swap digital tokens across blockchains – are creating opportunities for exchanges and other businesses to offer more secure alternatives.

Crypto exchanges are deepening their capabilities to provide bridge-like services on various blockchains. Users invested in Bitcoin can easily participate in the financial or gaming apps of other networks. Customers can easily swap their Ether for Solana-based non-fungible tokens (NFTs) for buying and selling.

Instead of a bridge, users can deposit an Ethereum-based NFT and withdraw it on Solana using FTX. More software developers, such as the institutional lending platform Maple Finance, are migrating to new blockchains, eliminating the need for bridges in some transactions.

While such precautions may have been in the works prior to the breaches, their importance and appeal have grown after hackers stole more than $1 billion from crypto bridges, such as Wormhole and Ronin.

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