JPMorgan: Crypto Market Facing A Cascade of Margin Calls, More Bloodbath Ahead?

Bhushan Akolkar
November 10, 2022
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Crypto-crash

The FTX drama has spillover the entire crypto market with another 10% crash over the last 24 hours. In less than a week, the broader crypto market has lost 20% of its value i.e. equal to $200 billion.

The latest report from JPMorgan shows that the crypto market is facing a “cascade of margin calls”, failing to meet it could cause major liquidations in the market.  As per JPMorgan strategists led by Nikolaos Panigirtzoglou, the Bitcoin price could collapse all the way to $13,000.

The BTC price is already down by 20% on the weekly chart. As of press time, Bitcoin is trading 11.75% down at a price of $16,143 and a market cap of $309 billion. In a report published on Wednesday, the JPMorgan team wrote:

“What makes this new phase of crypto deleveraging induced by the apparent collapse of Alameda Research and FTX more problematic is that the number of entities with stronger balance sheets able to rescue those with low capital and high leverage is shrinking” in the crypto sphere.

JPMorgan on FTX-Led Bloodbath in Crypto

The FTX episode has spread like a contagion in the market. Also, there’s a lot of drama with FTX chief Sam Bankman-Fried struggling to find news investors in the market. A day after announcing their support to acquiring FTX’s non-U.S. assets, Binance has backed out of the deal on Wednesday.

Now market analysts have a strong fear that any potential bankruptcy of FTX could lead to a contagion in other crypto outfits. As a result, investors are still coming to terms with the FTX episode.

JPMorgan’s Bitcoin price prediction of further fall comes on the basis of Bitcoin’s production cost to miners. As we know, with the Bitcoin price drop on one hand and rising energy costs on the other, miners have been forced to liquidate their BTC holdings to cover their operational costs.

“At the moment, this production cost stands at $15,000, but it is likely to revisit the $13,000 low seen over the summer months,” said JPMorgan.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.