Renewed Vigor In DeFi And NFT Markets, JPMorgan Cites Rising Crypto Optimism By Benzinga
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Published Nov 30, 2023 22:20
Updated Nov 30, 2023 23:40
© Reuters. Renewed Vigor In DeFi And NFT Markets, JPMorgan Cites Rising Crypto Optimism
Benzinga – JPMorgan on Thursday highlighted a resurgence in the decentralized finance (DeFi) and non-fungible token (NFT) sectors in a research report.
This revival is attributed to the growing anticipation of a U.S.-based spot Bitcoin (CRYPTO: BTC) exchange-traded fund (ETF), which has positively influenced the cryptocurrency market’s mood, Coindesk reported.
According to the report, this uptick follows a nearly two-year period of decline, fostering a sense of optimism about the prospects of DeFi and NFT activities.
The report, led by analystNikolaos Panigirtzoglou, expressed cautious optimism: “While we do not doubt this recent revival in DeFi/NFT activity is a positive sign, we believe it is too early to be getting excited about it.”
DeFi refers to blockchain-based financial activities, including lending and trading, while NFTs are blockchain-based digital assets representing ownership of either virtual or physical items, and they are tradeable.
JPMorgan analysts noted a partial recovery in DeFi, attributed to increased trading activity, some of which occurs on decentralized exchanges.
Also Read: Hong Kong Financiers Pen Letter To Lawmakers For ICO Portal In Bid To Boost Economy
Another contributing factor is the rise of liquid staking, particularly by Lido. They also observed that Ether (CRYPTO: ETH) has been underperforming compared to other cryptocurrencies.
Consequently, evaluating the total value locked (TVL) in ETH terms shows some improvement, given the greater gains in other digital assets recently.
The report also finds encouragement in the emergence of new chains and DeFi protocols like Aptos, SUI, Pulsechain, Tenet, SEI, and Celestia over the past year.
Additionally, the advent of Bitcoin ordinals has positively impacted NFTs.
However, the Ethereum blockchain seems to have not benefited from this resurgence in DeFi and NFT activities.
It continues to grapple with challenges related to network scalability, slow transaction speeds, and higher fees, along with increasing competition from other layer-1 chains.
Read Next: Swiss Firm Pando Asset AG Joins Bitcoin ETF Race, Seeks Nasdaq Listing For Crypto Security
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© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Renewed Vigor In DeFi And NFT Markets, JPMorgan Cites Rising Crypto Optimism
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