- The researchers elaborated on the decline in the number of strong competitors.
- The firm anticipated the price of Bitcoin falling below $13,000 as a result.
On Thursday, experts at JPMorgan Chase, headed by global market strategist Nikolaos Panigirtzoglou, released their assessment of the FTX scenario and bitcoin price forecast. The researchers elaborated on the decline in the number of strong competitors in the crypto market.
The analyst stated:
“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.”
Domino Effect Expected
Sam Bankman-Fried, CEO of FTX, allegedly reached out to several prominent cryptocurrency exchanges, including Coinbase and Okx, for assistance as the company faced a liquidity constraint. In the end, he tried Binance, despite CEO Changpeng Zhao’s (CZ) announcement that the exchange would be selling all of the FTX tokens (FTT) it had. Binance had planned to purchase FTX and supply liquidity, but the exchange backed out after doing due diligence.
Given the relationship between FTX.com, Alameda Research, and the rest of the cryptocurrency ecosystem, JPMorgan warned that a “cascade of margin calls” is likely to be underway. The global investment bank warned that the crisis at FTX might cause weeks of deleveraging in the cryptocurrency sector, with the price of Bitcoin falling below $13,000 as a result.
The experts at JPMorgan measure how much farther bitcoin’s price may fall based on its production cost. The current production cost remains at $15,000, but it is expected to drop back down to the summer’s low of $13,000 as per the firm.
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