"Virtual Currency Correction Market Resembles the 2017 Crash"

[Asia Economy Reporter Yujin Jo] JP Morgan recently diagnosed that the recent cryptocurrency correction phase resembles the sharp Bitcoin crash that occurred from the end of 2017.

Josh Younger, Head of Interest Rate Derivatives Strategy at JP Morgan, released a report stating that "the recent sell-off phase in cryptocurrencies including Bitcoin resembles the rapid rise and fall seen in late 2017 and early 2018," Bloomberg reported on the 25th (local time).

According to the cryptocurrency information site CoinMarketCap, the global market value of cryptocurrencies has fallen nearly 40% in just ten days since the 15th. This decline was influenced by market anxiety heightened by remarks from Elon Musk, CEO of Tesla, and news of strengthened cryptocurrency regulations in China and the United States, which dampened investor sentiment.

The report analyzed that this high volatility resembles the panic experienced by coin investors in early 2018. At the end of 2017 and early 2018, when the crash occurred, Bitcoin's market capitalization dropped by more than 40% within a few days. It is also similar in that cryptocurrency investors diversified their investments from Bitcoin to altcoins (cryptocurrencies other than Bitcoin) at that time.

As of 2 PM that day, Upbit's Altcoin Index (UBAI) was at 7474.97, down 7% over the past week, and compared to the all-time high on the 11th of this month (11,239.64), it plunged 34%. This means that the market capitalization of altcoins disappeared by about 34% in just half a month.

However, there is also analysis that this correction will differ from early 2018. First, short-term volatility is limited to the North American region, unlike in the past, and prices in Asia and Europe are still maintaining a stable level.

There is also optimism that Bitcoin's entry into Wall Street mainstream and supply shortages will increase its value further. The report forecasted that although short-term corrections may occur due to increased institutional participation and market infrastructure maturity improving the soundness of the cryptocurrency-related market, this correction will not signify a transition to a bear market like in 2017.

This content was produced with the assistance of AI translation services.