- JPMorgan’s notes on August 9 state that crypto prices have found a floor in the last few weeks.
- The notes further state that a combination of positive data and the possibility of the Ethereum Merge are the main reasons for this uptrend.
After slight gains in the crypto market recently, the leading financial institution, JPMorgan, has claimed that the market seems to have “found a floor.” One of the firm’s analysts, Kenneth Worthington, stated in a note to customers on Monday, August 8, that the recent bullishness in the crypto sector is due to Ethereum’s main upgrade (the Merge) scheduled for September 2022.
The Merge will see the switch of the Ethereum network from a proof-of-work (pow) network to a proof-of-stake (PoS) network. The JPMorgan analysts also noted that the recent gains have caused the crypto market cap to hit the $1 trillion level again. They further said that the gains are also happening because the market is gradually recovering from the effects of the terra network crash.
It seems the crypto market has found a floor even though trading volumes aren’t as high as expected. The reduced contagion effect from the Terra/LUNA crash has helped.
However, the analysts believe the main reason for the positivity is the likelihood of the Merge happening this year and the success of the launch of recent testnets. These successful testnets indicate that the Merge would be a reality this year. Recall that the network completed its Ropsten and Sapolia testnets in June and early July, respectively.
The effect of BTC’s and ETH’s prices on crypto
The bank’s analysts further said another factor that shows the market has hit the floor is the recent gains of the two leading digital assets (Bitcoin, BTC, and Ethereum, ETH). It is the first time in two months that BTC and ETH would gain up to 36 percent and 102 percent, respectively.
However, Bitcoin is still more than 60 percent off its peak price of $68,000 set last November. Ethereum’s price has been bullish since announcing September 19, 2022, as the date for its Merge upgrade. It is one of the top gainers among other cryptocurrencies following a poor first half of the year. Hence, JPMorgan analysts forecast a positive sentiment on the crypto market if the upgrade is successful.
The benefits of the Merge
As previously reported, Ethereum’s bullishness caused the asset’s market cap to hit the $219 billion mark. However, the latest data from our data shows that the second leading digital asset lost 4.56 percent in the last 24 hours and currently trades at $1,685. There are various predictions that the Ethereum ecosystem and the broader crypto market will significantly benefit from the Merge.
However, some of its community members are still opposed to the upgrade. These aggrieved members are forming a group to fork the Ethereum network and retain the Ethereum pow network. Nevertheless, Ethereum CEO, Vitalik Buterin, doesn’t believe this group’s actions won’t have any significant effect on the new Ethereum pos network.
EIP-1559 was an attempt to create a bullish narrative at the expense of the miners. As one of the most important pillars of any Proof-of-Work (PoW) network, miners naturally are a political force and should wield some political power and influence,
— EthereumPoW (ETHW) Official (@EthereumPoW) August 10, 2022