JPMorgan: Bitcoin Could Crash 25% Amid FTX Contagion Crisis

The financial catastrophe currently imploding cryptocurrency exchange FTX is spilling over into the broader sector, threatening to take down the world’s largest digital token with it.

According to a JPMorgan note seen by Business Insider, the bank’s analysts project bitcoin will plummet by at least 25% to $13,000 thanks to the FTX fallout that’s plaguing the crypto sector. Investors in the space are likely being hit with demands from lenders to provide additional funds, increasing the risk that some might succumb to the financial pressure. “It looks likely that a new cascade of margin calls, deleveraging and crypto company/platform failures is starting,” the strategists wrote.

The note highlighted FTX founder Sam Bankman-Fried’s rise to become one of the most prominent champions of the crypto space, before losing 94% of his entire wealth within a span of 24 hours, leaving him in dire need of rescue. However, “the number of entities with stronger balance sheets able to rescue those with low capital and high leverage is shrinking within the crypto ecosystem,” the Wall Street analysts explained.

Unless the FTX blowout is resolved quickly, the carnage could continue escalating for several more weeks. “With the crypto market cap standing at just above $1 trillion before the FTX/Alameda Research collapse, our guess is that the crypto market will find a floor above $500 billion in the current deleveraging phase.” The price of bitcoin slumped to the lowest in almost two years following news of Bankman-Fried’s bankruptcy filing.

Information for this briefing was found via Business Insider and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

When 4% of Global Copper Disappears Overnight | David Gower – Emerita Resources

Mining M&A: Gold X2 Acquires Kesselrun Resources

They Said Oil Was Dead. They Were Wrong. | Michael Judson – Record Resources

Recommended

Military Seizes Power in Madagascar After President Flees

Altamira Gold Hits 395.5 Metres Of 0.4 g/t Gold At Maria Bonita

Related News

US Government Seizes Sam Bankman-Fried’s $460 Million Robinhood Stake Tied To FTX

The US government is in the middle of seizing around $460 million-worth of Robinhood Markets...

Thursday, January 5, 2023, 09:52:44 AM

Evergrande: Big Idea Cash Is Crumbling With Michael Saylor

Joining us this afternoon on the Daily Dive is special guest Michael Saylor, CEO of...

Sunday, September 26, 2021, 04:05:00 PM

Binance Pulls Out Of Voyager Deal, Blames “Hostile” US Regulatory Climate

The bankrupt crypto lender Voyager Digital announced on Tuesday that cryptocurrency exchange Binance.US had canceled...

Wednesday, April 26, 2023, 11:11:18 AM

Sam Bankman-Fried Is Reportedly Selling His Luxury Penthouse

The former FTX CEO Sam Bankman-Fried is rumored to be selling his luxury 12,000-square-foot penthouse...

Monday, November 14, 2022, 02:19:00 PM

Bitcoin: Futures Point To Continued Bullishness

Bitcoin continues to perform well, defying the predictions of many that it has moved too...

Sunday, April 11, 2021, 09:00:00 AM