JPMorgan Chase & Co., an American multinational investment firm, has established a price for Bitcoin (BTC), much lower than the asset’s current value.
Alternative assets, such as digital currencies, “could consistently outperform into 2022,” according to a report to investors as part of the bank’s first forecast focusing on alternative investments.
According to the firm’s pricing model, Bitcoin’s “fair value” is about $35,000, which is around 45 percent less than its present market price of $63,281. Nonetheless, the analysts said that a price objective of $73,000 looks plausible if the relative volatility continues into next year, but not the sky-high projections many predict.
“This challenges the idea that a price target of $100K or above, which appears to be the current consensus for 2022, is a sustainable Bitcoin target in the absence of a significant decline in Bitcoin volatility.”
The present entry position looks unappealing, but digital currencies are on a multi-year structural rise, they said.
According to the experts, the alternative asset class, including private debt and private equity, would yield 11% next year, more than double the 5% increase seen in equities and fixed income. However, due to its fluctuation, they did not suggest cryptocurrency as a “core holding.”
After positive market action in August, which saw global cryptocurrency capitalization surpass $2 trillion by the end of August, JPMorgan analysts cautioned of turbulence in early September. As per CoinGecko, the market value has surged by 35% to $2.87 trillion in only two months.
In late September, JPMorgan CEO Jamie Dimon indicated that Bitcoin prices might still rise tenfold, but he isn’t interested in investing in it. The asset was likewise “worthless” the next month, according to him.
The bank’s retail wealth customers are intrigued since they were given access to the cryptocurrency in July. In addition, JPMorgan analysts observed in early October that institutional investors prefer Bitcoin over gold as an inflation hedge.
Morgan Stanley, a Wall Street financial firm, has also begun doing cryptocurrency evaluations. On Monday, the bank released a study for its wealth management customers that included industry trends, cryptocurrency market indicators, and possible regulatory implications.
As per sources, Morgan Stanley is one of some large investment banks seeking to acquire crypto expertise, notably JPMorgan, Wells Fargo, UBS, Citigroup, and Goldman Sachs.