Crypto’s total market capitalization surpassed $1 trillion as of February 02. But all of a sudden Bitcoin, Ethereum, and other major cryptocurrencies paused along with stock markets. Both crypto investors and stock market investors are disappointed with the unfavorable results of the JPMorgan survey and Silvergate investigation. In this article, I will be explaining why the crypto market discontinued its rally and what exactly happening in the market. For your ease, I have broken down this news into two topics.
- Silvergate under Investigation
- JPMorgan E-Trading survey
1.Silvergate is under investigation
US department of justice tightened the circle around Silvergate. Silvergate is a California-based Federal Reserve member bank and one of the top financial solution and digital assets service providers. According to the news reported by Bloomberg, that is Silvergate came under the inquiry of the US DOJ for its affiliation with centralized bankrupt FTX Exchange, its management, and Alameda.
Although, Silvergate is not charged with any criminal charges so far federal investigators are trying to look into it further. The bank representative confirms on Twitter that they “they have comprehensive compliance and risk management program” as reported in earlier by CryptoNewsBytes.
2. JPMorgan E-Trading Survey
A few days ago JPMorgan published the results of its recent Survey called the E-Trading Survey, in which hundreds of institutional investors responded and shared their opinions on five basic questions:
- What is your outlook for the impact of inflation when pricing it in for 2023, based on the region you are located in?
- What is the predicted impact of inflation, depending on the survey participants’ location by region?
- Which potential developments will have the greatest impact on the markets in 2023?
- What will be your greatest daily trading challenge in 2023?
- In the next 3 years, which technologies will be most influential for trading?
(JPMorgan Chase & Co. is a New York-based American multinational financial services company)
In response to the first question about the potential developments impacting the market in 2023, 30% of Traders believe that recession will have the greatest impact, 26% opinion is Inflation will be the greatest fear, 19% concerned about geopolitical conflicts, 14% think that market and economy dislocation would have the biggest impact,09% admit that government policy change would affect, 01% consider ESG belongings and surprisingly 0% participants believe that pandemic will have the greatest impact. I will be breaking down the complete report later this month.
In response to questions two and three, asked region-wise, about the impact of “inflation” on the market in 2023, and “where they see inflation in 2023”, 58% of participants from the US believe that inflation will remain stagnant in the running year whereas, 41% of respondents from the united kingdom see high inflation in the current year. However, in Europe, 56% of participants think that inflation will decrease and in the Asia Pacific region 40% believe that inflation will level off this year.
In response to question number four, about the “daily trading challenge in 2023”, 46% are afraid of Market Volatility.
In response to question number five, about the most influential technology of 2023, 53% of participants voted for AI/Machine learning. AI has become word of mouth these days, I will be writing a detailed article on AI and related tokens in the coming days, stay tuned for that.
Conclusion
Everything was going amazing after a long period in both Crypto and Stock Markets after controlled inflation and nominal change in interest rates in the US, But in the first week of Feb these two pieces of news along with “Tech Giants earnings” run a fear wave in retail investors again which as result lost the overall market momentum that we can see in technical charts using momentum indicators.
The total crypto market cap also reached its resistance where a pullback was expected. Including, 30% of Traders are concerned about recession, 26% are worried about Inflation, and 19% fear geopolitical conflicts, in sum almost 75% of institutional traders are uncertain about 2023 and causing a slowdown in the market but, here is the question, “do institutional investors speak the truth in the public survey? “
Image from: MartechSeries, Silvergate & JPMorgan
