JPMorgan, the banking giant, provided insight into the entire drama surrounding the fall of the cryptocurrency giant, FTX. Sam Bankman-Fried’s FTX was one of the key players in the centralized portion of the cryptocurrency industry. Fried was also acting as a last resort liquidity provider for the financially troubled projects similar to Terra.
However, after facing liquidity crunches and other issues, the FTX empire has now collapsed. The fall of the giant has alerted and concerned global regulators and investors worldwide. JPMorgan equity analyst Steven Alexopoulos shared his thoughts on the FTX event and its cascading effect on the whole industry.
Alexopoulos mentioned that the fall of FTX will prove to be a catalyst that will move cryptocurrencies two steps forward. JPMorgan also identified centralized players as the root cause of the recent collapses.
JPMorgan blames centralized players for the recent events
JPMorgan mentioned in a note that the fall of FTX sent shockwaves across the cryptocurrency markets. The banking giant believes that this could potentially pave the path for accelerated cryptocurrency regulation.
JPMorgan also addressed the fact that the recent cryptocurrency collapses have not been from decentralized protocols but from centralized players.
“Moreover, while the news of the collapse of FTX is empowering crypto skeptics, we would point out that all of the recent collapses in the crypto ecosystem have been from centralized players and not from decentralized protocols.”
The bank also believes that the recent events can awaken and speed up regulations by aiding in the institutional adoption of cryptocurrencies.