JPMorgan reiterated on Wednesday that the fair value of bitcoin was $38000, about 28% higher than the current level, which means that the price of bitcoin is expected to rebound sharply after the recent sale JPMorgan also said that cryptocurrency has surpassed real estate as one of its preferred "alternative assets", that is, assets that do not belong to typical categories such as stocks and bonds.
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The bank said it still believed that $38000 was a reasonable price for bitcoin. The price is about 28% higher than the current figure of $29700.
JPMorgan strategists including Nikolaos panigirtzoglou wrote in the report: "compared with January / February last year, the correction of the cryptocurrency market in the past month is more like surrender. Looking ahead, we expect a broader upward trend in bitcoin and cryptocurrency markets."
Cryptocurrency fell sharply in 2022 as investors sold off assets considered high-risk due to rising inflation and interest rates, the war in Ukraine and the global economic slowdown.
Bitcoin is down about 37% this year, while Ethereum is down about 48%. The total market value of all cryptocurrencies has plummeted from about $3 trillion in November last year to $1.3 trillion in May.
But JPMorgan said the sell-off would hurt cryptocurrencies more than other alternative investments such as private equity, private debt and real estate. The bank's strategist said in the report that this shows that cryptocurrency still has more room to rebound.
"Therefore, we replaced real estate with digital assets and hedge funds as our preferred alternative asset class," they wrote