In a note published on Wednesday, JPMorgan has provided the “fair price” of Bitcoin at 28% higher than its current trading level. The bank added that cryptocurrencies have surpassed real estate as a preferred alternative asset.
The bank's strategists noted that $38,000 was a fair price for Bitcoin, well over the trading level of $29,722 of Wednesday morning. The note from JP Morgan's strategists outlined their expectations going forward:
“The past month’s crypto market correction looks more like capitulation relative to last January/February and going forward we see upside for Bitcoin and crypto markets more generally.”
Despite the markets falling dramatically over the last month, and the collapse of TerraUSD, the investment bank noted that they preferred cryptocurrencies over real estate, with the note reading:
"We thus replace real estate with digital assets as our preferred alternative asset class along with hedge funds,"
The strategists led by Nikolaos Panigirtzoglou calculated Bitcoin’s fair value level against its volatility, around four times as volatile as gold, giving it their estimate of $38,000.
“The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” the strategists wrote in the note.
Panigirtzoglou’s long-term target for Bitcoin has increased from $146,000 last year to a theoretical target of $150,000.
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