Sam Boughedda

JPMorgan analyst Ken Worthington wrote Monday that May proved to be a difficult month in cryptomarkets. The ecosystem needs a new catalyst.

Analyst wrote that April’s already challenging environment was further exacerbated by May’s collapse of the UST algorithmic stabilitycoin. This caused a mixture of uncertainty and forced selling to adversely impact the wider cryptoecosystem.

He said that although trading volume in May appears to be slightly higher than April’s depressing April, almost all other indicators of growth have declined over the past month.

The analyst stated that although volume has somewhat rebounded, with a 17% increase over April’s levels, it is still below (35% lower) the more robust 4Q21 levels as well as below the more muted 1Q22 levels.

Worthington said that although they still love crypto-technology, “continued to believe the cryptoecosystem needs a fresh catalyst,” and the merger is one potential catalyst.

Merge is an upgrade of Ethereum. It will merge with the beacon-chain proof-of–stake system. This will end the proof-of–work for Ethereum and allow it to transition to proof-of–stake.