J.P. Morgan analyst: “while the news of the collapse of FTX is empowering crypto skeptics, we would point out that all of the recent collapses in the crypto ecosystem have been from centralized players and not from decentralized protocols."

J.P. Morgan crypto analyst Steven Alexopoulos found silver-linings in the FTX catastrophe, writing in U.S. Mid- and Small-Cap Banks Crypto Banking Weekly:

Collapse of FTX a Painful Step Back but Might Prove to be the Catalyst that Moves Crypto Two Steps Forward

With FTX emerging earlier this year as a white knight, bailing out troubled crypto-related companies, the news of FTX itself collapsing this week sent shockwaves through the crypto markets. While this is certainly a major short-term setback, we see the widely publicized collapse of FTX as potentially dramatically accelerating the timeline to which crypto-related regulation will be ushered in (similar to new banking regulation which followed the GFC).

As a result, we see the news surrounding FTX as one step back, but one that could prove to be the catalyst to move the crypto economy two steps forward (further unlocking the utility value of blockchain). In fact, we see the establishment of a regulatory framework as the needed catalyst to massively ramp the institutional adoption of crypto.

Moreover, while the news of the collapse of FTX is empowering crypto skeptics, we would point out that all of the recent collapses in the crypto ecosystem have been from centralized players and not from decentralized protocols.