JPMorgan Chase & Co (NYSE: NYSE:JPM) stated that it believes the cryptocurrency market is ending its extreme deleveraging phase.
What Happened: In a report released July 21, JPMorgan claimed it sees retail demand improving for the cryptocurrency sector. The bank further stated the intense phase of deleveraging caused by crashing prices and deleveraging across major crypto lenders is also coming to an end.
The report released on Thursday further stated, "The extreme phase of backwardation seen in May and June, the most extreme since 2018, appears to be behind us.”
The bank further highlighted that the recent relief rally experienced by the markets is not a result of futures or institutions. Thus, JP Morgan believes retail demand to be rising for cryptocurrencies, driving token prices higher.
Why It Matters: The past few months have seen an extremely bearish downturn in the crypto markets, with almost $2 trillion being wiped out of the sector. Furthermore, recent CPI data indicates large-scale inflation, deeming it to be at the highest it’s been in years.
As macroeconomic fears of an impending recession cause uncertainty in the sector, the recent report released by JPMorgan stands as a bullish ray of optimism in otherwise bleak conditions.
See Also: Is Bitcoin A Good Investment In 2022?
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