JP Morgan Suggest Bitcoin is 28% Undervalued, Cryptos are a ‘Preferred Alternative Asset
Despite the massive fluctuations in the crypto markets, JP Morgan believes that BTC is undervalued. Holding its estimate of its fair value at $38,000, JPMorgan fell back on its previous assessment in February, which valued BTC at $43,400. Approximately, this is 28% higher than its current price at around $29,000.
The bank also stated that it would be replacing real estate with digital assets as its preferred alternative asset. This is alongside hedge funds, citing “potential lagged repricing” in private equity, private debt, and real estate.
The appraisal is seen as good news by many, even though the price of BTC is under half of its all time high of $68,721. Along with increasing interest rates and the Ukrainian conflict, the crypto market is trying its hardest to deal with the collapse of Terra USD and LUNA.
“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,” the bank’s strategists, led by Nikolaos Panigirtzoglou, noted in the report.
The bank’s strategists also suggest that “the trajectory for VC funding would be crucial in helping the crypto market to avoid the long winter of 2018/2019,” which was preceded by the initial coin offerings boom. “Thus far there is little evidence of VC funding drying up post-Terra’s collapse. Of the $25 billion VC funding year-to-date, almost $4 billion came after Terra,” the strategists noted. “Our best guess is the VC funding will continue and a long winter similar to 2018/2019 would be averted.”