Key facts:
Venture capital financing has not been affected by the bear market. Companies with
Companies with good economic performance are helping those in difficulty.
The market capitalization of cryptocurrencies managed to surpass USD 900 billion at the beginning of this week, while the price of bitcoin looks to gain a foothold above USD 20,000. In addition to this bitcoin push being associated with high whale activity, which has restarted BTC buying, there are other indicators that the crypto winter is behind us, according to analysts at JPMorgan.
JPMorgan Strategist and Managing Director Nikolaos Panigirtzoglou highlighted that the effect of the collapse of firms like Terra and funds like Three Arrows may have been left behind, because important financing initiatives have emerged. “Indicators like our Net Leverage metric suggest that deleveraging is well under way,” Panigirtzoglou noted.
The specialist points out that other crypto firms with “stronger balance sheets” have stepped in to help “contain the virus that has spread through the bear market”. Panigirtzoglou is referring to the granting of a USD 250 million loan to BlockFi, by FTX, after a rumor spread about the purchase of BlockFi, as reported by CriptoNoticias.
Capital continues to enter the cryptocurrency market
Panigirtzoglou’s appreciation is also supported by the fact that venture capital financing has not been greatly affected by current market situations. Despite the bearish phase that the bitcoin and crypto markets are going through, that type of financing has added around 5,000 million dollars between May and JunePanigirtzoglou said.
For his part, eToro analyst Simon Peters argues that JPMorgan hits a crucial point when he claims that funding continues to flow into cryptocurrency projects. “What’s different now from previous setbacks is that retail investors are no longer the only ones experiencing the headwinds,” he said.
The main financial institutions, among others, are now also in the market. For Peters, JPMorgan is highlighting that,Although there is capital that is leaving the cryptocurrency sector, there is other capital entering. “Therefore, the essential thing for investors is to carefully consider the investment cases and look at those that present the greatest long-term opportunities,” added Peters.