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After the enormous success of cryptocurrencies, everybody wonders what happened to this industry. There is no single answer as the crypto world includes numerous stakeholders and impacts as well as numerous industries.
The fact that after the peak of success, cryptocurrencies lost their value and caused huge damage to financial sectors. Until today, when digital currencies slightly start recovering or at least are in stable condition, there are different positions on how investors should handle the ongoing situation.
Today, we will have a quick overview of the cryptocurrency sector crash and also review the latest comments from Jamie Dimon, the chief executive of JPMorgan.
The Unusual History Of The Cryptocurrency Industry
In the third quarter of 2021, cryptocurrencies were the main news around the world. Historically high prices on Bitcoin as well as on other digital currencies increased the popularity and trading enormously. Everything was going on perfectly until the beginning of 2022 when immediately the price of BTC dropped by 70%. When the bitcoin price was reduced so significantly, other currencies faced the same negative fact too. The second largest currency ETH mostly lost its complete value.
Because of such damage, there were several opinions about why it happened. Most experts started to blame it on the increasing recession and growing interest rates. Another side of experts claimed that it was also caused by the war between Russia and Ukraine. Whatever the reason was, the negative result and billions of USD losses did not change.
Even though the results for summer 2022 showed a slightly positive result, it is considered that the active recovery will last till the end of 2026.
According to the Biden Administration, the last month was not a good example of recovering too. More specifically, the price of BTC was reduced by 20 000 USD. Ethereum results were similar and its fluctuations were even steeper.
Because of the mentioned results, Jamie Dimon warned investors that the cryptocurrency industry, especially BTC and ETH, will continue to reduce their values. The main reason why is the fact of the enormous price crash, which included about 2 trillion USD in total. For more about JPMorgan's comments, check out the news down below.
These Decentralized Ponzi Schemes Are Dangerous For Investors - JPMorgan About Cryptocurrencies
As soon as the cryptocurrency industry started growing, China's Blockchain-based Service Network, same as BSN announced a new initiative that aimed to increase commercial adoption of blockchain technology. This initiative was called the Ponzi scheme, which was described as the greatest development in human history.
But as the representative of JPMorgan claims, the Ponzo scheme is nothing more than a new danger for investors. If we look at other comments from Jamie Dimon, it is clear that he has never been a huge fan of the crypto industry. For example, at the beginning of the rise of the digital currency market, in 2014, he said that this would be an example of terrible market value. Later in 2017, his comments about BTC were short but very negative. It considered Bitcoin and the whole industry as a big fraud.
After a massive crash of 3 trillion USD, Jamie Dimon still is in the same position and has negative views about the recovery trend. Is Dimons’ opinion a complete negative on the whole industry? No, because he accepts, stablecoins. These are the cryptocurrencies that have a similar structure including the decentralized system and blockchain-based technology. Using stablecoins properly was the result of how JPMorgan started adopting crypto blockchain from Wall Street.
More specifically, the bank started to allow its customers to purchase different types of cryptocurrencies including Bitcoin and Ethereum. This was the way they started creating the JPM coin blockchain which made this successful bank the first on the market that started involved in Metaverse. For other similar banks, it was a popularization of the metaverse with its blockchain technology-based assets.
What Is The Most Effective Solution According To Jamie Dimon
As said, the main skeptic, Jamie Dimon is now a chief executive of the first metaverse bank. Branding the cryptocurrency is how Dimon predicts that it will cause a 1 trillion USD raise on the market, annually.
More specifically, JP Morgan opened an Onyx lounge that provides ETH-based services in the metaverse. It is located in Metaiuku, which is a virtual shopping district in Tokyo. As the bank claims, the first step into the metaverse gives them limitless opportunities
With the enormous predicted revenue, it will also give the bank great benefits with its reputation and service improvement. For example, it will increase the value and opportunities for NFT as well as GDP for the second life. Also for JP Morgan, it will be a way of attracting 200 new partners including Warner Music. The latest report of the bank includes more stable and long-term benefits, which partly proves the correctness of Dimons’ opinion about the effectiveness of cryptocurrency branding.
