The American multinational investment bank JPMorgan has set a price for bitcoin (BTC) that is significantly lower than the value of the asset currently being traded.
In a report to investors as part of the bank’s emerging prospects focused on alternative investments, strategists said that alternative assets, including cryptocurrencies, “should continue to deliver better results until 2022.”
They also confirmed that the “fair value” of bitcoins is around $ 35,000 based on the company’s pricing model, which is about 45% below the current trading price of $ 63,281. That said, the $ 73,000 price target seems reasonable if relative volatility persists over the next year, strategists added, but not the higher targets that many expect.
“This casts doubt on the notion that a price target of $ 100,000 or more, which appears to be the current consensus for 2022, is a sustainable target for bitcoin in the absence of a significant decrease in bitcoin volatility.”
They suggested that the current entry point “looks unattractive,” but the crypto asset is in a “multi-year structural rally.”
Analysts concluded that an alternative asset class, which includes private debt and private equity, will yield an 11% return next year, double the 5% gain from stocks and bonds. However, they did not recommend cryptocurrencies as their “main asset” due to their volatility.
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JPMorgan strategists warned of volatility in early September following bullish market activity in August that brought total cryptocurrency capital to $ 2 trillion in late August. Two months later, market value rose 35% to $ 2.87 trillion, according to CoinGecko.
At the end of September, JPMorgan CEO Jamie Dimon said bitcoin prices could rise 10x, but he was not interested in investing in them. He also said the asset would be “worthless” next month.
The bank’s wealthy clients are clearly interested in this and gained access to the class of cryptoassets in July. In early October, JPMorgan strategists pointed out that institutional investors prefer bitcoin over gold as a hedge against inflation.
Wall Street investment bank Morgan Stanley also analyzes cryptocurrencies. On Monday, the bank released a report to its asset management clients outlining industry trends, cryptocurrency market calculations and potential regulatory impact.
Morgan Stanley is reportedly one of a number of big investment banks, including JPMorgan, Wells Fargo, UBS, Citigroup, and Goldman Sachs, that have been trying to hire crypto experts recently.