Decentralized finance (DeFi) and non-fungible token (NFT) activity has revived in recent months as expectations of approval of a U.S.-listed spot Bitcoin (BTC) exchange-traded fund (ETF) have improved sentiment in the cryptocurrency market, JPMorgan Chase (JPM) said in a research note on Thursday, according to the report.

The increase comes after nearly two years of downward movement, "therefore providing reason for optimism that the worst may be over regarding the medium-term trajectory of DeFi/NFT activity," the report said.

“While we do not doubt that the recent resurgence in DeFi/NFT activity is a positive sign, we believe it is premature to get excited about it,” wrote analysts led by Nikolaos Panigirtzoglou.

DeFi is a general term for lending, trading and other financial activities on the blockchain. NFT is a digital asset on the blockchain that represents the ownership of virtual or physical items and can be sold or traded.

JPMorgan said some of the DeFi recovery was expected given the increase in trading activity, some of which is executed on decentralized exchanges. Lido’s liquidity monitoring is also partly to blame.