After bitcoin plummeted roughly 75% from its November all-time high, crypto markets seem to have “found a floor,” JPMorgan said in a note on Monday.
Bitcoin and ether have soared 36% and 102% from their mid-June lows, respectively, and the total market capitalization of cryptocurrencies has reclaimed the $1 trillion level, according to data from CoinMarketCap.
Analysts at JPMorgan said there are two reasons driving the recent strength in the cryptocurrency market.
“What has helped, we think, has been more limited new contagion from the collapse of Terra/Luna,” JPMorgan said, referring to the stablecoin implosion that led to tens of billions of dollars in losses and sparked leverage unwind that wiped out crypto firms like hedge fund Three Arrows Capital and crypto broker Voyager Digital.
“However, we think the real driver has been the Ethereum merge and positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June, indicating the merge is viable in 2022,” JPMorgan said.