JPMorgan analysts have expressed worries about possible risks in the cryptocurrency market, noting the lackluster venture capital investment into the sector in 2023 despite recent market gains. The analysts mentioned that their indicators for crypto VC funding seem relatively weak this year compared to past years.
📉 The current price of Bitcoin stands at $70,185 reflecting a 24-hour decrease of 0.62%.JP Morgan Bearish on Cryptocurrencies? #JPMorgan analysts say sluggish #cryptocurrency VC inflows could pose downside risk. #Bitcoin halving countdown. Long and short showdown kicks off.… — CoinW (@CoinWOfficial) April 12, 2024
Analysts believe that a revival in crypto venture capital investments is essential for a long-term improvement in the crypto market. However, the current low levels of VC funding pose a potential danger to this recovery, as argued by these analysts. Although $3.2 billion has been invested in crypto through VC channels this year, this amount falls short of the $4.1 billion raised during the first four months of 2021.
Despite the crypto market recovery this year, it is worth noting that several venture capital firms have recently or are in the process of raising new funds. For instance, 1kx has secured $75 million, Paradigm is allegedly negotiating for between $750 million and $850 million, and Galaxy Digital, Hack VC, and Hivemind Capital have reportedly gathered funds totaling $100 million, $100 million, and $50 million respectively.
Hedge funds specializing in cryptocurrencies have become more bustling this year, according to JPMorgan analysts. The value of their managed assets has reportedly surged by approximately $20 billion during the past six months. However, there’s only a 50% chance or less that an Ethereum ETF will be authorized in May, as per the same analysts. Nonetheless, it is expected that the U.S. Securities and Exchange Commission will eventually approve such crypto hedge funds.
Also read : BlackRock Names JP Morgan and Jane Street in its Bitcoin ETF Amendment.
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2024-04-12 09:27