While altcoins have made significant advances in terms of market share, JPMorgan analysts remain concerned
JPMorgan analysts have cautioned clients that cryptocurrency markets appear frothy following August’s trading boom, which saw spot market trading volumes surpass $1 trillion once again. According to Markets Insider, JPMorgan analysts suggested in a note to clients that crypto markets, particularly altcoins and NFTs, are becoming overly expensive.
“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.” According to the bank’s researchers, altcoin trading now accounts for approximately 33% of the whole cryptocurrency market, up from just 22% in early August.
While many cryptocurrency traders are ecstatic about the price increases, researchers fear the apparent surge in interest may not be sustained for an extended period of time. The analysts also highlighted the net inflow of retail capital into US stocks, which reached $13 billion in August, aided by Reddit-inspired day traders, following a record high of $16 billion in July. They believe the buying frenzy has spread to NFTs, Decentralized Financial Infrastructure, and smart contract platforms such as Solana, Binance Coin, and Cardano.
Spot investors have propelled several major altcoins to new all-time highs. Cardano (ADA) went above $3 for the first time today, while Solana (SOL) has increased by more than 400 percent from August’s start, according to CoinMarketCap.
Bitcoin has also demonstrated incredible strength, surging above $50,000 for the first time since May 2021. Meanwhile, OpenSea, one of the major NFT markets, has seen its trade volume climb by more than 76,000 percent since the start of 2021. By August 31, DappRadar reported that trading volume had topped $4 billion.
According to Dune Analytics, trading volume for Defi coins climbed 152 percent month over month in August, pushing total trading volume beyond $11 billion. Numerous trading platforms and Defi protocols achieved significant milestones, with Uniswap surpassing Coinbase’s daily trading volume on August 30 and Synthetix reclaiming $1 billion in total value locked (TVL).
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