• Crypto market under pressure
• JPMorgan sees signs that deleveraging is coming to an end
• Crypto crisis over soon?
In the past few weeks, crypto investors have had to digest a lot of terrible news. After the collapse of the Terra/LUNA stablecoin project, the crypto crisis spread to cryptolenders like Celcius and Babel, who had to freeze customer funds to get their liquidity problems under control. The fact that the crypto hedge fund Three Arrows Capital (3AC) then went into a tailspin and was no longer able to service its lenders ultimately even led to the insolvency of the crypto exchange Voyager Digital, which had to bear the consequences of 3AC’s default.
advertising
Trade Bitcoin and other cryptos with leverage (long and short)
Bitcoin and other cryptocurrencies have recently corrected significantly. Trade cryptos such as Bitcoin or Ethereum with leverage at Germany’s No. 1 CFD provider and participate in rising and falling prices.
JPMorgan sees light at the end of the tunnel
According to experts at the major bank JPMorgan, what forced Voyager to file for Chapter 11 bankruptcy could possibly have been the turning point for the battered crypto market. The deleveraging phase on the crypto market is already very advanced and may not last much longer, according to a study by bank strategist Nikolaos Panigirtzoglou. The liquidity crisis at the hedge fund Three Arrows Capital is a “manifestation of this deleveraging process,” according to the statement.
“The current deleveraging cycle may not be very long,” the team of strategists said confidently, citing “the fact that crypto companies with stronger balance sheets are stepping in to curb the contagion.” Specifically, the experts are likely to be focusing on crypto billionaire Sam Bankman-Fried, who provided capital to two struggling crypto companies to prevent them from collapsing. At least for Voyager Digital, which was provided with a credit line worth 200 million US dollars and a revolving facility of 15,000 bitcoins, the investment did not have any immediate positive effects, and the company consciously took the step into bankruptcy.
Still, JPMorgan appears to believe the crypto market may be through its worst: Indicators such as the company’s net debt ratio “suggest that deleveraging is already well under way,” according to the strategists, according to Bloomberg.
Editorial office finanzen.net
Image sources: r.classen / Shutterstock.com, Chinnapong / Shutterstock.com