The historic deleveraging of the cryptocurrency market could be coming to an end, which could signal the close of the worst of the bear market, according to a JPMorgan analyst.
In a Wednesday note, JPMorgan strategist Nikolaos Panigirtzoglou highlighted increased willingness of firms to bail out companies, and a healthy pace of venture capital funding in May and June as the basis for his optimism. He said key indicators support the assessment:
"Indicators like our Net Leverage metric suggest that deleveraging is already well advanced."
The deleveraging of major crypto firms, where their assets have been sold either willingly, in a rush, or via liquidation, began largely in May when the Terra ecosystem collapsed and wiped out tens of billions of dollars. Since then, crypto lenders BlockFi and Celsius, and investment firm Three Arrows Capital have run into their own problems.
Panigirtzoglou added that the severity of deleveraging of some crypto firms could be so severe that they...
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