Last year in November, the crypto market reached its peak, as its total market valuation crossed the $3 trillion mark.
The entire year had been a good one for crypto, but that was the beginning of the decline. Since it reached its peak, the market has been on a decline.
Back then, almost all cryptocurrencies, including Bitcoin, had recorded all-time high values, but the bullish cycle in the market came to an end not long after.
Market conditions
Since then, the crypto market has seen a massive drop in its valuation. At one point in 2022, the total market cap even went below the $1 trillion mark and is still hovering close to it.
Likewise, all cryptocurrencies have also suffered, with Bitcoin shedding almost 70% since it reached its peak in November. Plus, many crypto entities have also gone into liquidation.
The price crash has also happened because macro conditions have also become quite unfavorable. Inflation has reached decade highs and the US Federal Reserve has not been able to make a dent in it so far.
Even though things do not seem to be changing anytime soon, crypto proponents are still of the opinion that the ‘crypto winter’ will come to an end.
JPMorgan’s executive
Some may argue that this is nothing more than wishful thinking on the part of crypto enthusiasts, but even influential and experienced people, including an executive at JPMorgan, also share the same opinion.
Marko Kolanovic works at the leading financial services firm as the Global Head and has positive expectations from the crypto industry in the near future.
The executive said that he as well as JPMorgan believes that the risk assets, including crypto, are close to hitting bottom and the same applies to the stock market.
Once that happens, it is eventually going to result in a rally that will see the market climb back up once more.
The high-ranking executive is quite bullish on crypto, regardless of the current state of the market.
The conditions
Of course, this does not seem likely to many given the existing conditions. Bitcoin lost 12% of its value in a week and has dropped below the $18,500 mark for the first time in years.
Similarly, the second-largest crypto by market cap i.e. Ethereum also crashed by 20%, even though it finally underwent the merge that saw it shift from a PoW protocol to a PoS one.
The same is true for the remaining altcoin market as well, most of which are recording losses. Yet, Kolanovic believes that corporate earnings have still done well.
He added that low investor positioning can actually be beneficial for the market in the long run. He admitted that the Federal Reserve is likely to continue with its hawkish stance for now.
But, he said that despite the negative expectations in terms of inflation, the market will not slide further and once the Fed begins cutting rates, the crypto market will see its trend reverse.
