JP Morgan: Crypto is Flowing out of Exchanges. The Rebound is Not Even Close

Nov 18, 2022

JP_Morgan

FTX collapse has caused investors to withdraw money from major cryptocurrency exchanges, according to analysts at JPMorgan.

A note to investors published by the investment bank on Wednesday pointed out that all the top exchanges saw outflows during the previous week, with Gemini, OKX, and Crypto.com experiencing the most significant losses.

In addition, analysts pointed out that the stablecoin market is shrinking, which may result in further price drops for Bitcoin and other popular crypto assets.

The FTT crypto exchange, once among the most popular crypto asset exchanges, collapsed last week, leaving investors in the red by billions of dollars. FTX and its related companies went bankrupt because the company used customers' funds to make bets through Alameda Research, which was founded by Sam Bankman-Fried, FTX's CEO, as well.

A leaked document surfaced that Alameda's assets were mainly held in FTX-issued token FTT and other various extremely illiquid assets, which led Binance, the main competitor of FTX, to announce that it would sell off all the holdings of FTX tokens, which triggered FTX's downfall.

Cryptomarkets were sent into a tailspin after the FTX's collapse, causing all major cryptocurrencies to fall in price dramatically. As a result, the price of Bitcoin, the coin with the largest market capitalization, dropped to its lowest point in two years.

As analysts at JPMorgan pointed out, mentioning Terra's collapse, which also caused investors to suffer losses of billions of dollars, "the current deleveraging phase that started with the collapse of Alameda Research and FTX is likely to reverberate for at least a few weeks, inducing a cascade of margin calls, deleveraging and crypto company/platform failures."

In this context, "deleveraging" refers to reducing debt that investors or companies took on previously to invest in the cryptocurrency industry. Crypto market analysts generally agree that a bottom will only be reached only after bad debts are settled.

Analysts added that as long as the stablecoin market continues to shrink, recovery will be difficult. "It would be difficult here to imagine a sustained recovery in crypto prices without the shrinkage of the stablecoin universe stopping," according to the note.

Stablecoins are cryptocurrencies whose price is fixed to a specific asset, such as the dollar or gold. In contrast with Bitcoin or other volatile digital assets, these assets are specifically created to maintain a stable value over time.

Crypto traders often use stablecoins to make quick transactions in other coins or tokens without having to convert to fiat, namely USD, so stablecoins are widely viewed as the foundation of the crypto trading market.

According to JPMorgan, the stablecoin market capitalization topped $186 billion before Terra collapsed, then steadily declined — nearly $26 billion was wiped out through stablecoin redemptions.

Subscribe Our Newsletter

B2Broker Presents Its Institutional Liquidity New Offer

Constantine

B2Broker Presents Its Institutional Liquidity New Offer

As a result of continuous enhancements to both its liquidity and technology solutions, B2Broker, a leading global liquidity provider for Cryptocurrency, Forex, CFD, and technology solutions for brokerages and exchanges.

Companies
B2PRIME’s Founder Shares Quarterly Letter: 2024 Highlights

Hazem

B2PRIME’s Founder Reflects on 2024 Achievements

From regulatory expansion to a 730% increase in trading income, B2PRIME reflects on a successful 2024 and reveals exciting new plans for 2025.

Companies
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Alexander

What Is GameFi? — On the Intersection of Gaming and Finance
GameFi is a world where DeFi meets gamification, offering players true digital asset ownership and potential real-world earnings.

discover
5 Top-Tier Breakthrough Trading, Crypto and Fintech Industries Software Solutions in 2022

Constantine

5 Top-Tier Breakthrough Trading, Crypto and Fintech Industries Software Solutions in 2022

At the intersection of finance and technology, FinTech is an expansive industry that continues to grow at a rapid pace. This market features innovative approaches to goods and services offered by the conventional financial sector combined with technological advances from tech companies or new entrants.

Crypto Exchange Business
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Alexander

    What is a Fair Value Gap? A Guide to Trading Market Imbalances

    What is Fair Value Gap

    Vitaliy

    Triangle Patterns in Trading: Mastering Ascending, Descending & Symmetrical Strategies for Maximum Profit

    Triangle Patterns in Trading: Ascending, Descending & Symmetrical Guide

    Alexander

    What Is COTI? Payments, Token & Price Prediction

    What is a COTI coin

    Constantine

    Best Copy Trading Software in 2025

    Best Copy Trading Software in 2025

    Alex

    What Is an AI Agent? The Future of Finance Explained

    AI Agent Explained

    Constantine

    How to Start a Liquidity Provider Business?

    How to Start a Liquidity Provider Business

    Constantine

    How to Start a White Label Brokerage?

    How to start a white label brokerage

    Constantine

    How to Start a Multi-Asset Brokerage?

    How to Start a Multi-Asset Brokerage

    Hazem

    Crypto Ransomware – How They Happen and How to Avoid Them

    Crypto ransomware explained

    Constantine

    Best Web3 Browsers in 2025

    Best Web3 Browsers

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.