JPMorgan analysts are cautious amid signs of DeFi and NFT resurgence
A report by JPMorgan analysts indicated a temporary recovery in DeFi and NFTs. Analysts, however, caution against premature optimism. Their report shows significant growth in NFT sales volume and increased overall value locked in DeFi.
JPMorgan analysts, led by Nikolaos Panigirtzoglou, cautiously approach developments in decentralized finance (DeFi) and intangible tokens (NFTs).
Their report highlights the temporary recovery in these sectors, which shows potential optimism. However, the analysts emphasized the need for a proactive attitude, pointing out the micro-factors that influence the market's changes.
DeFi and NFT recovery tokens
In their latest report, JPMorgan analysts express a pessimistic view of the recent recovery in DeFi and NFTs, but caution against premature optimism.
The report noted a significant revival in NFT sales volume and increased the overall value locked in DeFi after nearly two years of decline. Despite these positive signs, analysts say these are the first signs of revival and should be approached with caution.
The recovery in DeFi is due to the natural increase in crypto trading activities in general, thanks to the role played by decentralized exchanges (DEXs). In addition, an increase in liquid reserves from early 2023, led by Lido in particular, contributed. The cautious stance stems from Ethereum's challenges, including high fees and low transaction speeds, which hamper its performance despite its central role in DeFi and NFTs.
Emergence of new chains when Ethereum slows down
The report acknowledges the emergence of new blockchains and platforms such as Aptos, Sui, Sei, Celestia and Blur, which are seen as catalysts for the industry. However, Ethereum's underperformance relative to other cryptocurrencies affects the total value of its lock in terms of Ether. Analysts see upcoming Ethereum upgrades as possible solutions to the problems, but remain cautious, citing uncertainty about the timing and effectiveness of these upgrades.
In conclusion, JPMorgan analysts offer a bullish view on the recent recovery in DeFi and NFT, urging a cautious approach amid positive signs and potential challenges. The technical tone emphasizes the importance of overall understanding of market dynamics and the evolving landscape of decentralized finance and intangible tokens.
