Analysts at JPMorgan Chase (JPM) are warning investors that the current slump in cryptocurrencies is likely to continue as there are no near-term catalysts for digital assets.
In a new report, JPMorgan says that “enhanced retail engagement” is needed to lift the cryptocurrency sector out of its current funk.
The U.S. bank notes that the global cryptocurrency market was worth $2.02 trillion U.S. at the end of August, down 24% from a peak reached in March of this year when Bitcoin (BTC) hit an all-time high.
“We continue to see the crypto ecosystem lacking major catalysts, and we thus expect crypto token and asset prices to be incrementally more sensitive to macro factors,” wrote JPMorgan in its report on the state of crypto.
The update from JPMorgan comes as the price of Bitcoin, the world's largest cryptocurrency by market capitalization, declined nearly 10% in August, according to market data.
Currently trading at $55,800 U.S., Bitcoin’s price is down 25% from a record high of just under $74,000 U.S. reached in March of this year.
Other cryptocurrencies are also on the downslope, with Ethereum (ETH), the second largest cryptocurrency, flat on the year and trading at $2,360 U.S. presently.
In a bright spot, JPMorgan noted that cryptocurrency trading volumes increased in August, with total average daily volumes rising 8%.
Trading in Bitcoin and Ethereum each increased by more than 10% month-over-month in August.
However, with no clear catalysts on the horizon, JPMorgan warns that cryptocurrency prices are likely to remain depressed in coming weeks and months.
