Crypto markets have hit the floor, says JP Morgan
Anticipation over the Merge, a much-awaited upgrade to the Ethereum (ETH) network, is the main driver behind a rally in cryptocurrencies over the last few weeks, financial services firm JP Morgan said, and claimed the market had hit the floor despite subdued trading volumes.
Even as the world’s largest digital currency Bitcoin (BTC) fell as much as 75 percent from its all-time high in November last year, crypto prices, notably those of BTC and ETH have rebounded considerably in July, gaining 36 percent and 102 percent, respectively, from their mid-June lows.
With BTC crossing the psychologically important level of $24,000, the crypto market has reclaimed the $1 trillion level in market value, led by a rise in the prices of blue-chip tokens.
Limited contagion from Terra collapse
“What has helped, we think, has been more limited new contagion from the collapse of Terra/ Luna. 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 analyst Ken Worthington wrote in a client note.
ETH Merge expected in the week of September 19
The second-largest digital asset will transition from the energy-intensive proof-of-work (PoW) consensus to a more energy-efficient proof-of-stake mechanism, known as the Ethereum Merge, in the week of September 19, after completing two testnets in advance of the event.
Worthington wrote: “It appears that the crypto markets have found a floor” despite trading volumes still being depressed.
In this context, he noted that cryptocurrency exchange Coinbase had lost ground to rival FTX in July. Notably, Coinbase was ahead of FTX in terms of volumes, but
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