Multinational investment bank, JPMorgan Chase, has warned that investors should be wary of the ‘frothy’ altcoin market. Explaining in a note, the bank claimed that the current altcoin rally is a sign of market froth and should cause concern among market investors.
The bank argues that altcoins now make up a third of the total crypto market capital as assets like Cardano beat the price level of $3 today for the first time. In late August, it jumped 19% in 24 hours and hit the then all-time high of $2.55. There have been indications of success for Cardano ahead of its smart contract launch that is set to happen on Sept 12.
Another Altcoin, Solana, entered into the top ten of the CoinMarketCap after it experienced a 70% growth in just one week. The growth is due to the excitement around non-fungible tokens (NFTs) and the growing decentralized finance space. JPMorgan believes that the rise in the altcoin market is less about technical reasons and more retail:
“The share of altcoins looks rather elevated by historical standards and in our opinion, it is more likely to be a reflection of froth and retail investor ‘mania’ rather than a reflection of a structural uptrend.”
Image Credits: Pixabay
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