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JPMorgan Sees Problems For Ethereum Now That The Merge Has Been

Ethereum, XRP en meeste altcoins staan diep in het rood

Ethereum (ETH) completed the Merge last week and now the popular blockchain is officially based on Proof-of-Stake (PoS). But JPMorgan sees problems for Ethereum after the switch.

Ethereum Merge was ‘sell the news’

The world’s largest investment bank stated this in a report to investors last Wednesday, writes CoinDesk. Now that the consensus algorithm uses strike the blockchain has become much less decentralized. There are now only a few parties that make up the majority of all staked ETH (sETH) hold.

The bank also emphasizes that the price of ether has fallen sharply in the past week, which would be due to a “buy the rumour, sell the news” event. Investors had been aware of the switch for a few years and therefore bought the token earlier and were willing to sell around the time of the merge. It reflects what some analysts expected before the Merge was completed.

Ethereum also has a fairly extensive futures market with regulated institutions. JPMorgan sees quite a bit of backwardation here, meaning that the actual price of the underlying asset is higher than that of the futures contracts. That is bad news for the market, as institutions are now less willing to invest in ether and the futures contracts based on it.

JPMorgan no friend of crypto

The CEO of the major investment bank, Jamie Dimon, is known for not being a fan of cryptocurrencies. Despite this, JPMorgan is investing in blockchain technologies and the bank even has its own ‘JPM Coin’ (a stablecoin). Yesterday, JPMorgan CEO Dimon referred to crypto as “decentralized Ponzi fraud.” Like most CEOs of the big banks, Dimon has been very wary lately. Earlier this year, he warned that there is a metaphorical storm is coming.

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