- JPMorgan’s cryptocurrency expert said the surge in altcoins appears unsustainable and has echoes of the market crash in May.
- Nikolaos Panegirtzoglu wondered if the rise in coins like Ada Cardano was justified.
- Altcoins have risen sharply in recent weeks on hopes that they will be widely used in DeFi and NFTs.
- See more stories on the Insider Business page.
A digital asset expert at JPMorgan said the recent rally in altcoins appears unsustainable and could lead to a cryptocurrency crash of the kind seen in May.
Ada, binance, solana, and other Cardano tokens have surged over the past few weeks as excitement builds over their potential use in decentralized finance (DeFi) and non-fungible tokens (NFTs). Most of the big cryptocurrencies remained sharply higher during the month, even after the cryptocurrency market experienced heavy selling on Tuesday and another volatility on Friday.
But the rally does not appear sustainable, as it is largely driven by unrealistic expectations about the tokens, according to Nikolaus Panigerzoglu, global market analyst at JPMorgan.
“There’s a big question mark here,” Banegirzoglu, a crypto expert at the bank, told Insider last week.
“Do the fuss with Cardano, Binance, Solana, [and other] Ethereum alternatives justified? Will there be enough traffic in these networks [and] Portfolio addresses, to justify this kind of evaluations? “
He said it looks as if the cryptocurrency market is in a “melting” phase, with investors rushing into assets that are rising in an attempt to capture some of the gains. He pointed out that such a stage often precedes a severe fall.
“I think we can repeat what we saw in May,” the strategist said. That month saw the collapse of the cryptocurrency market – including bitcoin and ether – after the price of cryptocurrencies such as Dogecoin and XRP surged.
Read more: Research Analyst at $2 Billion Crypto Company Explains Bullkadot Case Most Investors Ignore – and Shares Why Cardano’s ada Looks Overrated After a Fantastic Series
Likewise, altcoins have risen sharply in recent weeks, with Solana up 318% in the 30 days to Friday morning, according to data site CoinGecko. Cardano’s ada cryptocurrency is up 29% over the same period, while XRP is up 23%.
Retail investors have been drawn to some network tokens that they expect will challenge Ethereum to widespread use in the fast-growing realms of DeFi and NFTs.
DeFi is the use of crypto technology to remove the need for intermediaries in financial contracts, and NFTs are a thriving asset class of crypto holdings and artwork.
Bobby Ong, co-founder and CEO of CoinGecko, told Insider that the excitement was “definitely exaggerated.”
He sees it as a typical crypto cycle: investors first accumulate bitcoin, then resort to highly volatile alternatives in search of more gains, before the crash causes people to leave the market and eventually start buying bitcoin again.
Panigertoglu said he even saw some similarities with the crypto crash of 2018, which was also preceded by a surge in altcoins and ended with Bitcoin losing more than 80% of its value. However, he said it is unlikely that the cryptocurrency market will crash that hard again, because financial institutions and big companies like Tesla have bought into it.
However, there are opposing voices. Curtis Ting, managing director of Europe at crypto exchange Kraken, does not see the rise of cryptocurrencies as a red flag. He said the sharp sell-off in cryptocurrencies of the kind seen on Tuesday is “helping the market reset itself.”
“The surge in altcoins is helping to diversify the asset class and creating a feedback loop that could ultimately benefit the price of bitcoin,” he told Insider.
قد يهمك أيضاً :-
- لكم وزن الذهب في العراق اليوم 23 ايلول | اخبار النهضة
- أسعار الصرف في المغرب اليوم الخميس 23 سبتمبر 2021
- القصة الكاملة لتحدي هينيدي وفان دام
- French asset manager Jade Comer rejects Ray Dalio's fear of Bitcoin
- الأهلي يواجه الزمالك اليوم في صدارة احتراف كرة اليد - اليوم السابع
- قطاع النفط في تراجع
- Elon Musk Says Dogecoin Fee Reduction 'Very Important' To Make Adoption In Places Like AMC Theaters Viable | Benzinga