JP Morgan: “BTC volatility hinders its institutional adoption”

JP Morgan BTC

JP Morgan analysts point out that the volatility of Bitcoin is one of the factors that will hinder the institutional adoption of the cryptocurrency.

JP Morgan and cryptocurrencies

Economics, blockchain experts and analysts at the New York -based bank have warned investors that the two most valuable cryptocurrencies, namely Bitcoin and Ethereum, are facing “serious problems”.

They also stated that the current bitcoin market crash “looks less like a capitulation than last May,” when stocks lost billions in a week.

“We believe that Bitcoin’s volatility and boom-and-bust cycles will continue to deter institutional adoption.”

The letter emanating from JP Morgan analysts claimed that Bitcoin, currently priced at $38,444, was five times more volatile than gold, having fallen 44% from its November high of $69,044.

Many cryptocurrency speculators think of Bitcoin as “digital gold”, a hedge against inflation like precious metals.

Some Ethereum competitors – Solana, Terra, Binance Smart Chain – were gaining ground in the field of decentralized finance.

JP Morgan BTC volatility
In the opinion of JP Morgan analysts, the crypto market and its volatility make it unattractive for institutional investment

Non-Fungible Tokens (NFTs)

DeFi APPs make use of the blockchain in order to automate the work of banks. Since many people use Ethereum, it has become expensive and slow. Other blockchains have emerged to compete with Ethereum, and they are doing well:

“What has been noteworthy during this month’s crash is that Ethereum has failed to regain market share against its main competitors,” the JP Morgan report reads.

NFTs are digital assets that represent art, video, and music on the Ethereum network. Analysts say that other networks like Solana’s network is more affordable and faster than Ethereum’s.

For commercial purposes, it is becoming more and more popular. But Solana has its own issues, like network congestion and slowdowns. The network was down for 17 hours in September.

But SOL, Solana ‘s native cryptocurrency, is holding steady at around $100, ranking sixth in terms of market cap.