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JPMorgan investment bank experts believe that the current market scenario, caused by the bankruptcy of the FTX exchange, will ultimately have a positive impact on the cryptocurrency industry.
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Recent events in the crypto sector againdemonstrated high volatility in the digital asset market. While many investors around the world are panicking, JPMorgan is looking at current market events in a different light and sees them as a positive catalyst.
Bank experts said that the FTX crisis will go tobenefit the industry and help it move a few steps forward. The sudden collapse of one of the largest crypto companies will push regulators to accelerate the process of forming regulatory rules that allow effective control of the sector. And the introduction of a comprehensive regulatory framework will facilitate the institutional acceptance of cryptocurrencies.
According to JPMorgan analysts, imperfectindustry regulations have led to the fact that in most cases the collapse of cryptocurrency projects is associated with centralized companies, rather than decentralized institutions. This reinforces the prevailing view of the decentralized finance (DeFi) sector as more resilient to shocks.
Formerly analysts at investment bank JPMorganwarned the community that the fall of major cryptocurrencies is not over, and the crisis associated with the bankruptcy of the FTX exchange could lead to “cascading liquidations”. A number of crypto sector experts have supported JPMorgan's view that the market's decline will continue for some time and compare it to the 2008 financial crisis.
However, the JPMorgan team believes that this timethe blow to the overall crypto market cap is likely to be smaller as the TerraUSD episode has already caused a pullback in risk taking and a more wary attitude towards investing in dubious projects.