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JPMorgan Sees Crypto Retail Demand Improving, End of 'Intense' Deleveraging Phase
Improved investor sentiment and increased demand ahead of the Ethereum Merge has sparked a market recovery, according to the bank.
Updated Apr 9, 2024, 11:11 p.m. Published Jul 21, 2022, 12:00 p.m.
Demand among retail investors in the crypto market is improving, and the "intense phase" of deleveraging appears to be over, JPMorgan Chase & Co. (JPM) said in a report on Thursday.
- "The extreme phase of backwardation seen in May and June, the most extreme since 2018, appears to be behind us," the bank said.
- Crypto markets have bounced back in recent weeks as investors anticipate the Ethereum "Merge," the blockchain's transition to a proof-of-stake consensus algorithm that is set to commence on Sept. 19.
- Ethereum network activity has increased alongside an uptick in investor sentiment, JPMorgan said.
- Bitcoin and ethereum are up 30.82% and 72.86%, respectively, since diving to lows of $17,600 and $876 in June.
- The recovery in asset prices is not seen in the crypto fund or futures space, indicating that demand is driven by retail investors, JPMorgan said, before adding that "smaller wallets have seen an increase in ether or bitcoin balances since the end of June at the expense of larger holders."
- The bank also notes the recovery in staked ether (stETH), a token from the Lido protocol that is supposed to trade at a price close to ether, as an example of how the deleveraging event that ravaged companies such as Three Arrows Capital, Terra and Celsius is now over.
- Staked ether dropped to a ratio of 0.94 to 1 in June following an unwinding of large quantities triggered by the collapse of Terra.
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- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
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Bitcoin could see further declines if traditional markets sharply pull back, or just possibly a broad tumble in stocks could set the stage for a bull run in crypto.
What to know:
- Investor cash allocations fell to a record-low 3.3%, according to the Bank of America's latest Fund Manager Survey, while exposure to equities and commodities reached the highest levels since early 2022.
- Optimism about a soft landing and rising profits pushed sentiment to its strongest point since mid-2021.
- A decline in traditional markets might seem to point to further losses in crypto, but it could also be a bullish signal.
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