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The recent recovery in decentralized finance (DeFi) and non-fungible tokens (NFTs) is not yet strong or definitive, JPMorgan analysts reported.
According to JPMorgan Analysts, There Is No Recovery in the DeFi and NFT Sector Yet
Analysts led by Nikolaos Panigirtzoglou wrote in their report that while they have no doubt that this latest revival in DeFi / NFT activities is a positive sign, it is too early to get excited about it. These are “only temporary signs of revival,” they said.
The nearly two-year slowdown in NFT sales volume and total value locked DeFi has accelerated in recent months.
According to analysts, this recovery has given rise to “optimism that the worst may be behind us in terms of the medium-term course of DeFi/NFT activity,” but it is too early to start being optimistic about this.
Analysts also noted that some recovery in DeFi is “natural” given the increased crypto trading activity, some of which is channeled through decentralized exchanges.
Meanwhile, Ethereum price showed a lower performance compared to other cryptocurrencies. This means that measuring the total value locked in Ethereum will “mechanically show some revival as the price of several smaller cryptocurrencies has increased more than Ethereum in recent months,” according to analysts.
According to JPMorgan analysts, Ethereum's well-known problems such as high fees and slow transaction speeds have hindered the blockchain's growth despite the recent DeFi/NFT revival.
“Ethereum does not appear to have benefited much from the recent resurgence in DeFi/NFT activity,” analysts said.
*This is not investment advice.