Amid the announcement of a significant rise in Bitcoin (BTC) prices since the beginning of February, JPMorgan analysts have speculated that BTC’s “fair value” is actually below Tuesday’s market price.
In the bank’s latest note to investors released on Tuesday, JPMorgan strategists said BTC’s current fair value is around $ 38,000. Led by JPMorgan’s cryptocurrency market analyst Nikolaos Panegirzoglu, strategists have estimated a “fair value” based on the fact that bitcoin is almost four times the volatility of gold.
Analysts suggested that Bitcoin’s “fair value” would rise to $ 50,000 in a scenario where the volatility level would be halved, adding:
“Bitcoin’s biggest problem going forward is the volatility and boom and bust cycles that prevent institutional adoption.”
At the time of writing, Bitcoin is trading at around $ 43,000, up 12% from JPMorgan’s proposed “fair value”. Bitcoin was previously worth around $ 45,000, after reaching around $ 44,900 on Tuesday, according to data from CoinGecko.
Despite the decline in the current “fair value” of bitcoin, JPMorgan strategists still predict that bitcoin will rise well above $ 100,000 per day. According to the report, Panigirtzoglou’s theoretical long-term target for bitcoin is $ 150K, up from $ 146K in January 2021.
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JPMorgan analysts also note that Bitcoin’s price correction in January looks “less capitulatory” than the correction recorded in May 2021, when BTC fell 50% from over $ 60,000 to around $ 33,000. exchanges, however, point to a “long-term and therefore more worrying trend” that began in November, strategists added.
Strategists previously released a similar report in November, claiming that Bitcoin’s “fair value” is around $ 35,000, about 45% below the market price of $ 63,281.