Previously clients would need to set standing orders for payments to take place at a particular time; now they can program them to kick in when the relevant criteria are met.
Crypto’s Current Climb: JPMorgan Suggests Rally May Be Reaching Its Peak
JPMorgan analysts have cast a skeptical eye over the recent crypto rally, indicating it may be built on sand rather than solid ground. Their latest report conveys a guarded stance, suggesting that the market’s exuberance may be outpacing the underlying fundamentals.
As the market’s enthusiasm swells, fueled by pivotal developments such as the US Securities and Exchange Commission’s (SEC) potential green light of the spot Bitcoin exchange-traded fund (ETF), these financial experts are urging caution, advocating a closer examination of the elements at play.
A Closer Look At ETF Approval And Regulatory Battles
Within the crypto sphere, JPMorgan analysts disclosed that two significant events have captured investor interest and driven prices upward.
These events include anticipating a US-approved spot Bitcoin ETF, which has ignited hopes of new capital inflows. At the same time, recent legal tussles involving the SEC have raised expectations for a more permissive regulatory environment.
However, the JPMorgan team, led by analyst Nikolaos Panigirtzoglou, presents a contrarian view, deconstructing these drivers and their probable impact on the market. They argue that an ETF approval would usher in fresh capital, which might be misleading.
The analysts propose that rather than attracting new investment; the approval could redirect existing funds from current Bitcoin investment products into the new ETFs. The JPMorgan team noted:
First, instead of fresh capital entering the crypto industry to be invested in the newly-approved ETFs, we see as a more likely scenario existing capital shifting from existing bitcoin products such as the Grayscale bitcoin trust, bitcoin futures ETFs and publicly listed bitcoin mining companies, into the newly-approved spot bitcoin ETFs.
This shift, they assert, would not necessarily expand the market’s capital base. JPMorgan’s team points to the tepid response to similar products in Canada and Europe as evidence, suggesting that a US spot Bitcoin ETF might encounter the same lukewarm reception.
Legal victories against the SEC in high-profile cases like Ripple and Grayscale are also interpreted as potential precursors to a regulatory softening. Yet, the analysts remain unconvinced, citing the lingering aftereffects of the FTX scandal and the inherent risks of an under-regulated market.
They further disclosed that these factors will likely keep the regulatory tightening trend intact, with little room for significant easing.
Bitcoin Halving: A Pre-Priced Crypto Event?
The report delves into the much-discussed Bitcoin halving, which traditionally stokes bullish forecasts. However, JPMorgan’s analysts believe the market has already factored in the halving’s supply-squeeze implications. They noted:
This argument seems unconvincing as the Bitcoin halving event and its effect are predictable and in our opinion are well factored into Bitcoin price.
They calculate that based on current data, the production cost of Bitcoin post-halving should double, particularly from the current $ $21,000 to $43,000.
Their analysis concludes with a sobering outlook, anticipating a potential “buy the rumor, sell the fact” scenario post-ETF approval. Such a dynamic could see prices climb on anticipation and plummet once the event materializes, a pattern familiar to seasoned market observers.
Echoing similar sentiments, financial commentator Peter Schiff has cast doubt on the longevity of Bitcoin’s price surges driven by ETF speculations.
Schiff warns that post-approval, Bitcoin might face a shortage of positive triggers, potentially culminating in a market sell-off as the ‘buy the rumor, sell the news’ phenomenon unfolds.
How many times can #Bitcoin rally on the same ETF rumor? Once a U.S. Bitcoin EFT is approved, or $GBTC is able to convert into an ETF, there will be no more “good” news for Bitcoin to rally on. After years of buying the rumor, everyone will finally be able to sell the news.
— Peter Schiff (@PeterSchiff) October 16, 2023
Meanwhile, Bitcoin has seen quite a significant move in the past few hours. The asset has now marked a new high for 2023, surging above $37,000, up by nearly 10% in the past day.
Featured image from Unsplash, Chart from TardingView
JPMorgan Handles $1B Transactions Daily In Digital Token JPM Coin: Bloomberg
JPMorgan has plans to widen the coin’s usage the bank’s head of payments Takis Georgakopoulos said in an interview.
XRP Price Set For Massive Rally As BlackRock And JPMorgan Make Their Move
Amid the struggles in the cryptocurrency market, recent reports have suggested that the world’s largest asset manager Blackrock, and financial giant JPMorgan might spark a massive bull run for the XRP price as they work simultaneously.
Blackrock, JPMorgan Move Might Affect XRP Price
According to the report, Forbes Senior Contributor, Billy Bambrough, highlighted that Blackrock and JPMorgan are purportedly laying the foundation for an impending surge in the cryptocurrency sector. The report further identified several collaborative cryptocurrency moves taken by the two financial powerhouse firms.
Bambrough pointed out a recent report that claims that the asset manager recently utilized JPMorgan’s Ethereum-based Onyx network and tokenized collateral service.
Blackrock reportedly used the network to tokenize shares from one of its financial market funds, which was later transferred to the London-based Barclays in an over-the-counter (OTC) derivatives trade.
Over-the-counter (OTC) derivative operations occur between two parties. However, the specifics of the order quantity, cost, and other information of Blockrock’s transactions with Barclays remain concealed from the public.
Following the report by Bambrough, it was revealed that Blackrock became the first Wall Street giant to make use of JPMorgan’s blockchain-based collateral settlement system. This was part of a move that Blackrock’s Chief Executive Officer Larry Fink, has stated will pave the way for the “next generation for markets.”
The Blackrock CEO’s previous statement in an annual letter to shareholders where he emphasized blockchain technology as “very important” in the past year was also mentioned in the report. Fink highlighted the role that blockchain technology plays in their financial operations.
Blockchain technology enables traditional assets to be “tokenized” on a public ledger, potentially simplifying and lowering the cost of transferring anything from stocks and bonds to real estate and alternative investments like art.
Due to this, Billy Bambrough believes that there will be a significant increase in the price of digital assets such as XRP, Bitcoin (BTC), and Ethereum (ETH) as a result of BlackRock and JPMorgan entering the cryptocurrency industry, considering their connections to the traditional market. In addition, Ripple is also aiming to establish the XRP Ledger as a crucial platform for the tokenization of real-world assets.
BlackRock using XRP would not doubt have an immense impact on the XRP price. An example of the kind of rally it could trigger is what happened back in June with Bitcoin when the asset manager announced it had filed for a Spot Bitcoin ETF.
Significance Of Blackrock’s Transaction Via JPMorgan Blockchain
So far, Blackrock’s partnering with JPMorgan marks a new milestone for the financial firm. Blackrock’s recent transaction via JPMorgan’s blockchain indicates a crucial contribution to the volume of the Ethereum-based network Onyx.
Additionally, the operation could unveil a new world of possibilities for established financial institutions which enables them to free up capital and boost efficiency across separate markets, as a spokesman from JPMorgan told Bloomberg.
JPMorgan’s Head of Trading Service Ed Bond, also stated that “institutions on the network can use a wider scope of assets to meet any collateral requirements they have on the back of trading.”
US Mega Bank JPMorgan Predicts Harsh Drop In This Bitcoin Metric
In a recent research report from JPMorgan, the financial firm has predicted a harsh drop for one Bitcoin metric, forecasting a potential decline of the Bitcoin Network Hash Rate by 20% leading up to the Bitcoin halving in April 2024.
JPMorgan Expects Bitcoin Hash Rate To Drop
In the report, JPMorgan stated that the Bitcoin mining industry is at a crucible stage leading all the way to the Bitcoin halving in April 2024 and beyond. This is because the approval of a Spot BTC exchange-traded fund (ETF) could spark a rally against the backdrop of record hash rates and the impending block reward halving that threatens the industry’s revenues and profitability.
The report highlighted that the total four-year block reward opportunity is estimated at $20 billion, due to the current price of Bitcoin (BTC), which is 72% lower than its all-time high in 2021. This figure represents a significant drop from its peak of $73 billion in April 2021 and has fluctuated around $14 billion and $25 billion since the past year.
As such, the financial firm expects the Bitcoin mining sector to see the predicted 20% hash rate drop at the next Bitcoin halving in April 2024.
“We estimate as much as 80 EH/s (or 20% of the network hash rate) could be removed at the next halving (April ‘24) as less-efficient hardware is decommissioned,” the report reads.
Bitcoin halving is an event that aims to control inflation and it involves the reduction of Bitcoin miners’ rewards by half, and it takes place roughly every four years after miners solve 210,000 blocks.
Analysts Reginald Smith and Charles Pearce noted in the report that the bank favors mining operators that can offer the best relative value in light of the existing hash rate, operational efficiency, power contracts, and more.
JPMorgan chose Bitcoin mining company CleanSpark (CLSK) as its top pick among several companies listed by the firm, highlighting that the mining company offers the best balance of scale, growth potential, power costs, and relative value.
In addition, the firm highlighted the significance of other mining firms it listed. These include Marathon Digital (MARA), Riot platforms (RIOT), and Cipher mining (CIFR).
According to the firm, Marathon Digital is the largest mining operator, with the highest energy costs and lowest margins. Meanwhile, Riot has lower energy costs and liquidity, but Cipher has the lowest power costs with limited growth.
The firm also included an outweight rating table and price targets of the mining operators in the report.
The high cost of mining and the removal of inefficient hardware have been seen as some of the factors that tend to affect the Bitcoin mining industry.
Large amounts of electricity are needed for mining, and at first, this makes it too expensive for miners to continue their operation. Nevertheless, many also tend to come back whenever the next bullish cycle drives Bitcoin’s price to unprecedented levels.
JPMorgan Debuts Tokenized BlackRock Shares as Collateral with Barclays
Is Ethereum’s Staking Boom A Ticking Time Bomb? JPMorgan Weighs In
Ethereum (ETH), a forerunner in the decentralized finance (DeFi) ecosystem, has seen a notable surge in its staking activities. This staking boom has raised eyebrows among experts from JPMorgan concerned over ETH’s increase in centralization and the consequences that may arise.
Ethereum, aiming to transition to a proof-of-stake consensus mechanism, opened the floodgates for staking. This meant holders could ‘stake’ or lock their tokens to support network operations like block validation. However, while this promises rewards for the stakers, JPMorgan analysts have reported that there could be ripple effects.
Ethereum Centralization Concerns Rise To The Surface
JPMorgan analysts, led by Nikolaos Panigirtzoglou, highlight the inadvertent increase in Ethereum’s network centralization, particularly post the Merge and Shanghai upgrades. The Ethereum network became “more centralized as the overall staking yield declined,” they noted.
According to the analysts, what’s leading to this centralization could be attributed to liquid staking providers. Lido, a notable player, has been pinpointed for its dominant role. The JPMorgan report noted:
The top 5 liquid staking providers control more than 50% of staking on the Ethereum network, and Lido specifically accounts for almost one-third.
The analysts further disclosed while platforms such as Lido tote their decentralized nature, the underlying reality appears different. The analysts said these platforms “involve a high degree of centralization.”
According to the analysts, the ramifications of such centralization can’t be understated. They mentioned that “a concentrated number of liquidity providers or node operators” might compromise the network’s integrity, leading to potential points of failure, attacks, or even conspiracy, resulting in an “oligopoly.”
They further highlighted that such centralized entities could censor or exploit user transactions, undermining the community’s interests.
The Rehypothecation Risk And Declining Rewards
Another dimension to the staking story is the looming threat of ‘rehypothecation.’ In simple terms, it’s the act of leveraging staked assets as collateral across various DeFi platforms. According to the JPMorgan’s analysts:
Rehypothecation could then result in a cascade of liquidations if a staked asset drops sharply in value or is hacked or slashed due to a malicious attack or a protocol error.
Furthermore, as Ethereum continues its journey on the staking path, the staking rewards seem to diminish. The report indicated a drop in total staking yield from 7.3% before the Shanghai upgrade to roughly 5.5% recently.
Regardless, Ethereum has shown a slight upward trajectory of 1.5% in the past 24 hours, with a market price currently sitting at $1,643 and a market cap of approximately $9 billion, at the time of writing.
Featured image from Unsplash, Chart from TradingView
Ethereum Has Become More Centralized Since the Merge and Shanghai Upgrades: JPMorgan
The increase in staking has reduced the appeal of ether from a yield perspective, the report said.
Banking Giants Abuzz About Tokenization of Real-World Assets as DeFi Craves Collateral
JPMorgan, Citi and Franklin Templeton are digitizing traditional assets. Will they end up trading on crypto networks like Ethereum?
Ethereum’s Shanghai Upgrade Has Failed to Boost Network Activity, JPMorgan Says
Daily transactions, daily active addresses and total value locked on the blockchain have all fallen since the upgrade, the report said.
JPMorgan Adjusts Bitcoin’s Production Cost: What This Means For BTC And Its Miners?
Recent adjustments by JPMorgan in its estimation of Bitcoin’s production costs have garnered attention. Previously standing at $21,000, JPMorgan’s revised Bitcoin production cost has now been pegged at $18,000.
This move is closely tied to the Cambridge Bitcoin Electricity Consumption Index’s (CBECI) decision to update its methodology, highlighting the interconnectedness of financial analyses and industry metrics. Notably, the CBECI is known for its critical role in tracking and estimating the electricity consumption of the Bitcoin network.
Revised CBECI Methodology’s Impact On Mining Costs
JPMorgan analysts, under the guidance of Nikolaos Panigirtzoglou, noted in a recent report that the new methodology changes the landscape of Bitcoin’s production cost estimations. The report revealed:
The current Bitcoin production cost falls to around $18,000 with the new methodology vs. $21,000 with the old methodology.
According to the analyst, this shift implies that future changes in electricity prices will have a comparatively lesser effect on mining costs.
The CBECI’s adjustments have a broader impact than simply changing estimates. Analysts have discovered that changes in electricity costs can significantly reduce the cost of producing 1 Bitcoin.
With the new CBECI methodology, this sensitivity has decreased slightly to approximately $3,800, compared to the previous $4,300 change for every one cent per kWh (kilowatt hour).
According to the analyst, this sensitivity is expected to double after the 2024 halving event, which will decrease miners’ rewards by half. This change will amplify the importance of cost management due to the higher impact of electricity costs on the overall mining expenses.
Bitcoin Latest Price Action
So far, Bitcoin is still very much in the red. Following the asset’s 13% drop in the past month, slipping below $29,000, Bitcoin hasn’t made any significant movement aside from a continued downward trend. However, over the past 24 hours, BTC has seen some gains.
The top crypto currently trades for $25,902 at the time of writing, up by nearly 1% in the past day. Over the past month, more than $70 billion has been erased from the asset’s market cap.
Nevertheless, the past 24 hours have seen the asset record an inflow of $3 billion. While BTC’s price and market cap suffered a bloodbath, its trading volume was negatively impacted.
Bitcoin has seen its trading volume fall from a high of $14 billion last Wednesday to as low as $3.5 billion yesterday and $8 billion in the past 24 hours. This is a significant plunge compared to the daily trading volume of more than $15 billion recorded early last month.
Featured image from iStock, Chart from TradingView
JPMorgan Shares Prediction On Bitcoin’s Next Move: What You Need To Know
In the latest research report, financial giant JPMorgan Chase & Co. has recently shared its belief in Bitcoin and the crypto market. Bloomberg reported, citing data from the financial services firm, that the current downtrend phase in the crypto market might just be nearing its conclusion.
Notably, the deceleration in the market momentum, primarily attributed to a series of positive legal and regulatory developments that eventually lost steam, is in its last stretch, according to the banking institution.
Market Dynamics And Future Predictions
JPMorgan’s analyst, Nikolaos Panigirtzoglou, analyzed the situation and highlighted the diminishing open interest in the Chicago Mercantile Exchange (CME) Bitcoin futures contracts.
In the financial realm, when open interest, which reflects the cumulative unsettled and active futures contracts on exchanges, plunges, it often signals a weakening price trend. Consequently, the report suggests, “We see limited downside for crypto markets over the near term.”
The crypto domain witnessed an uplift in recent months. This surge can be attributed to multiple applications, led predominantly by BlackRock Inc., aiming to roll out the first US spot BTC exchange-traded funds.
A favorable courtroom verdict for Ripple Labs in its legal confrontation with the Securities and Exchange Commission (SEC) also contributed to the further uplift in the market sentiment.
However, the initial exuberance has been waning, according to the report. Market participants are now in anticipation mode, awaiting resolve on spot Bitcoin ETF approvals.
Meanwhile, the US Securities and Exchange Commission’s (SEC) impending appeal against the Ripple decision, which is yet to be disclosed, amplifies a “new round of legal uncertainty,” heightening the market’s responsiveness to subsequent legal developments, according to the report.
Bitcoin (BTC) Latest Price Action
So far, Bitcoin is still struggling to break above a notable resistance. The asset has ranged between the $25,000 and $26,000 zone in the past 7 days and currently trades for $25,890, at the time of writing.
Bitcoin has seen a decline of more than 10% in the past two weeks, and it is currently in red, down by nearly 1% over the past 24 hours.
Alongside its price, Bitcoin’s daily trading volume has also plunged in the past week, indicating less trading activity. The asset’s daily trading volume has fallen from a high of over $30 billion recorded last Friday to $12.1 billion in the previous 24 hours.
Notably, the recent pullback in crypto isn’t isolated. It mirrors a larger recalibration across risk assets, like equities. According to JPMorgan’s report: “Frothy positioning in tech, elevated US real yields, and apprehensions regarding China’s economic trajectory,” were key contributing factors.
Featured image from Unsplash, Chart from TradingView
JPMorgan Sees Limited Downside for Crypto Markets in the Near Term
News that Elon Musk’s SpaceX had liquidated its bitcoin holding in the previous quarter acted as an additional catalyst for the correction in crypto markets in August, the report said.
JPMorgan Expands Its Blockchain-Based Token to Euro Payments: Bloomberg
Since its inception in 2019, over $300 billion in transactions have been processed using JPM Coin.
Fed rate pause triggers traders’ pivot to stocks — Will Bitcoin catch up?
U.S. stock markets hit year-to-date highs, the Fed pauses rate hikes, Binance.US and the SEC reach an agreement, but data shows Bitcoin bulls remain somewhat skittish.
JPMorgan, 6 Indian Banks to Settle Dollar Trades on Onyx Blockchain System: Bloomberg
The aim of the project is to settle dollar trades in real time around the clock as opposed to over a matter of days and only during the working week.
2nd biggest US bank failure — 5 things to know in Bitcoin this week
The failure of First Republic Bank marks a volatile beginning to a busy macroeconomic week, while Bitcoin already faces downside pressure.
AI tool created by JPMorgan analyzes Fed speeches to signal trades
The investment bank uses OpenAI’s ChatGPT to sniff out trading signals from Federal Reserve policy statements.
‘Tokenization Is the Killer App for TradFi’: JPMorgan
The head of the bank’s Onyx Digital Assets platform, Tyrone Lobban said there is added caution post-FTX, but JPMorgan’s strategy hasn’t at all changed.
U.S. Banking Crisis May be Vindication for Crypto Ecosystem: JPMorgan
Bitcoin rallied in tandem with gold as they are both viewed as hedges to a catastrophic scenario, the report said.
