The recovery of the DeFi/NFT sectors is not yet considered strong or conclusive: JPMorgan of Diario Bitcoin

According to analysts at JPMorgan (NYSE:JPM), a recovery is perceived in the DeFi and NFT space, but it is still too early to be optimistic and talk about a full reactivation.

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• According to JPMorgan, there will be some recovery in the DeFi and NFT sectors
• However, the signs are not yet conclusive to be optimistic.
• Both sectors were hit hard by the bear market.

US-based international bank JPMorgan said it senses a recovery in the decentralized finance (DeFi) and digital collectibles (NFT) sectors, but believes this move cannot be considered strong or conclusive.

On “the recovery” in DeFi/NFT The reading finds its place in a new report published by JPMorgan analysts and cited by The Block, in which they present a reading on the capital flows seen in DeFi and NFT are, and they “just” call “Preliminary signs of reactivation” instead of thinking of an upward movement that indicates a clear recovery.

According to the study’s lead analyst, Nikolaos Panigirtzoglou, there are clearly positive signs of a “revival in DeFi/NFT activity,” but he believes it is still too early to get people excited about these movements. He noted that “there is some optimism in the idea that the worst is behind us,” although he cautioned that it is still premature to be completely optimistic.

Panigirtzoglou delved deeper into this reading, pointing out that some recovery can be expected in the DeFi space, precisely due to the increase in the volume of business in certain cryptocurrencies and the increase in their price. However, it suggests that much of this activity on the Ethereum network is not widely used due to the operational inconveniences the network brings to the said ecosystem.

Therefore, researchers believe that the emergence of new blockchain networks has given a boost, hand in hand with the launch of more DeFi protocols and NFT services that boost these markets by leveraging technological advantages for commercial operations.

The DeFi and NFT Sectors At the time, the DeFi and NFT ecosystems were two of the most prominent in the digital currency space. However, these recorded quite significant declines as part of the bear market in 2022.

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Perhaps the hardest hit was the NFT sector, which saw a dramatic decline due to the proliferation of digital artworks. Although there are collections that enjoy great prestige today, such as the CryptoPunks or the Bored Ape Yacht Club, these items have not been immune to the impact of the decline in the price of ETH and other digital currencies.

On the DeFi sector side, with the decline in the prices of major cryptocurrencies, the native tokens that people generated in the various yield farming programs provided by various protocols were also affected. However, there are key players in this space who have reaffirmed their position, expanded their services and expanded into even more networks.

Article by Angel Di Matteo / DailyBitcoin

Image from Unsplash

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