JPMorgan still believes that bitcoin is highly undervalued, despite its crypto bear market. The bank today repeated its appraisal of bitcoin’s fair worth of $38,000, which it awarded the cryptocurrency in February when it was trading around $43,400. It’s almost 28% higher than its current price at $29757
JPMorgan Denies Crypto An Alternative Asset Class
Cryptos have surpassed real estate as one of the bank’s favored “alternative assets” or assets that don’t fit into traditional categories like equities and bonds, according to a note released on Wednesday.
The company stated it believes that $38,000 still represents a fair value for bitcoin. That sum was 28% higher than bitcoin’s morning price of $29k.
The bank’s strategists, including Nikolaos Panigirtzoglou, wrote in the note:
“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.”
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JPMorgan however warned that Bitcoin and other crypto currencies have experienced a steeper sell-off than any other investments, such as private equity or private debt. As a result, the bank believes that “digital assets” have greater opportunity for recovery than other alternative assets. According to the report:
“We thus replace real estate with digital assets as our preferred alternative asset class along with hedge funds.”
It is a vote to confidence in bitcoin and the wider cryptocurrency market. The market has been dealing with the collapse of TerraUSD algorithmic stablecoin and its sibling token LUNA at $50 billion. There are also rising interest rates and consequences of Ukraine’s crisis. Now, the market capitalization of all cryptocurrency is $1.2 trillion. That’s down from $3 trillion in November.
The total crypto market capitalization is $1.2 Trillion. TradingView
Despite the sector’s increased appeal, JPMorgan has reportedly altered Bitcoin and cryptocurrencies from a “overweight” to a “underweight” rating, implying that the bank is now less enthusiastic about the asset class and recommends a reduced exposure in an investing portfolio.
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