JPMorgan predicts Bitcoin collapse

JPMorgan issues a stern warning about the potential for Bitcoin to crash

JPMorgan has issued a stern warning about the potential collapse of bitcoin.According to the bank's strategists, the crisis surrounding exchange FXT could cause the top cryptocurrency to drop by 25%.

JPMorgan strategists warned on Wednesday that the financial problems of the major cryptocurrency hub FXT could cause a lot of trouble for other cryptocurrency companies and change how they are run.

According to a research note cited by Business Insider, analysts think that this will likely cause the price of Bitcoin to drop by 25%, to $13,000 per coin.

The Wall Street strategists wrote that lenders may ask crypto players to put up more collateral, which could cause some of them to fail. They said, "It looks like a new chain of margin calls, deleveraging, and crypto company/platform failures is about to start."

The JPMorgan team pointed out the close ties between FTX, its boss Sam Bankman-trading Fried's firm Alameda Research, and the crypto space as a whole.

The report says that Bankman-Fried, who was once called the "white knight of crypto" and compared to Warren Buffett, now seems to be the one who needs saving. "Within the crypto ecosystem, the number of entities with stronger balance sheets that can help those with low capital and high leverage is going down," the strategists said.

They said that the whole thing "creates a crisis of confidence and makes other crypto companies less likely to come to the rescue."

The chaos in the crypto world could last for a few weeks if FTX isn't saved quickly, experts said. "The crypto market cap was just above $1 trillion before the FTX/Alameda Research collapse, so we think the crypto market will find a floor above $500 billion during the current deleveraging phase," they said.

Bitcoin fell to its lowest level in almost two years on Wednesday, when news came out that Bankman-company Fried's might go bankrupt. This came after Binance, the largest cryptocurrency trading platform in the world, dropped plans to buy FTX.