JPMorgan Chase warns of the “bubble” crypto market after the August boom

JPMorgan Chase analysts warned clients that the cryptocurrency market looked like a bubble burst after the August trading boom saw the spot market trading volume once again surpassed $1 trillion.

In the report to the client Market insiderJP Morgan analysts said that the valuation of the crypto market, especially altcoins and NFTs, has become too high.

“According to historical standards, the share of altcoins seems to be quite high. In our view, this is more likely to reflect the bubble and retail investor fanaticism, rather than a reflection of a structural upward trend.”

Analysts at the bank noted that altcoin transactions now account for approximately 33% of the entire cryptocurrency market, up from 22% in early August.

Although many cryptocurrency traders are happy with the price increase, analysts believe that the apparent rise in interest may not be enough to sustain it for a long time.

Analysts also highlighted the net inflow of retail investment into US stocks. With the help of Reddit-inspired day traders, the net inflow as of August was US$13B, following a record high of US$16B in July. They believe that the buying frenzy has spread to NFT, DeFI, and smart contract platforms, including Solana, Binance Coin, and Cardano.

Spot investors have pushed several major altcoins above their previous all-time highs. According to data from CoinMarketCap, Cardano (ADA) today traded at more than $3 for the first time, while Solana (SOL) has risen by more than 400% since the beginning of August.

Bitcoin It has rebounded to above US$50,000 for the first time since May 2021, which also shows great strength.

related: The surge in activities and token prices indicate that “DeFi Summer 2.0” has begun

At the same time, OpenSea, one of the largest NFT markets, saw Trading volume Since the beginning of 2021, the transaction volume on its platform has increased by more than 76,000%.According to D, as of August 31, the transaction volume exceeded US$4BApplication radar.

OpenSea’s DappRadar data in August

According to Dune Analytics data, the transaction volume of DeFi tokens in August increased by 152% month-on-month, bringing the total transaction volume to more than $11B. Several trading platforms and DeFi agreements reached milestones, Uniswap exceeded Coinbase’s daily trading volume on August 30, and Synthetix’s total value lock (TVL) regained 1B USD.