According to a Bloomberg report, analysts at JPMorgan noted that deleveraging has reached an advanced stage in the cryptocurrency market and recovery may be just around the corner.
Analysts have pointed out that companies that use a lot of leverage are more susceptible in times of crisis, citing Three Arrows Capital as an example. Strategists also described the company's liquidity problems as a sign of this "deleveraging process."
Also, another indication that this pattern of deleveraging may be nearing an end soon, is the support that the hardest-hit companies are receiving inflows from stronger companies.
When looking at it from a more complete perspective, it is seen that the entire cryptocurrency space has suffered greatly during this period. The cryptocurrency market cap has dropped from a previous high of $3 trillion to less than a trillion. And now, it appears to have stabilized and to be closer than ever to recouping its losses.
JP Morgan Chase strategists firmly believe that the worst is over and that the industry may well be on the way to recovery.