JPMorgan, one of the largest investment banks, is approaching the recent resurgence of interest in decentralized finance (DeFi) and non-fungible tokens (NFTs) with caution.
According to their analysts, while these signs of recovery are positive, it is ‘too early to get excited’.
‘Even though we do not doubt that this recent revival of DeFi/NFT activity is a positive sign, we believe it is too early to rejoice,’
After almost two years of slowdown, partly caused by the bear market in the cryptocurrency market, the NFT and DeFi ecosystem has made a comeback. An increase in NFT trading volumes and Total Value Locked (TVL) in DeFi has been observed.
The TVL across all blockchains currently stands at around $47.5 billion, representing an increase of about 15% in the span of 30 days.
However, this resurgence could simply be ‘natural’ due to increased cryptocurrency trading activity, and it is premature to be optimistic at this stage, according to JPMorgan.
A Lack of Excitement around Ethereum?
The American giant took the opportunity to speak about Ethereum, highlighting the fact that ETH did not particularly benefit from this resurgence in DeFi and NFTs.
In fact, Ethereum’s performance has been inferior to that of other cryptocurrencies. According to JPMorgan analysts, the TVL of DeFi activities on Ethereum gives a false impression of a recovery, which is due to the greater increase in prices of lesser-known tokens compared to ETH in recent months.
The well-known problems of Ethereum, such as high fees and slow transaction speeds, continue to hinder the growth of its ecosystem, despite the increase in DeFi and NFT activities.
However, future updates to Ethereum could, according to JPMorgan, address these issues, although the timeline for these updates remains uncertain.