JPMorgan maintains a pessimistic view on cryptocurrencies and here are the reasons why

JPMorgan has voiced its apprehensions about the recent collapse of the $SI network, which it regards as “yet another setback for the cryptocurrency ecosystem.” This statement from the bank coincides with a decline in the shares of companies focused on cryptocurrencies, after Silvergate Capital announced its plans to wind down operations and voluntarily liquidate. Bitcoin, the largest cryptocurrency in the world, saw its price drop to an intraday low of $20,816 on the Bitstamp exchange. Coinbase’s stock fell by almost 1%, and the stocks of two major crypto mining companies, Riot Blockchain and Marathon Digital, each slid by 2.3%. According to JPMorgan, finding a substitute for the rapid network that processes dollar deposits and withdrawals will be a challenging undertaking. Therefore, the collapse of Silvergate has dealt a major blow to the cryptocurrency sector, which heavily depends on swift and effective payment processing networks. Additionally, the bank emphasizes the change in the CME futures spread, which suggests a decline in demand. This shift could be seen as an indication that investors are less optimistic about the future of cryptocurrencies.