JPMorgan says Bitcoin (BTC) is undervalued by 28%

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JPMorgan reverses its stance on Bitcoin, naming it the best alternative asset, while seven months ago its CEO Jamie Dimon called Bitcoin “useless”.


key points

  • On Wednesday, JPMorgan published a client report that touted Bitcoin as its top recommendation as an alternative asset — outperforming real estate, hedge funds and gold.
  • The report stated that the top cryptocurrency is expected to cost $38,000 per coin, meaning that Bitcoin is currently undervalued by around 28%.
  • Interestingly, this report comes after the collapse of the cryptocurrency market, which saw the entire industry lose around $500 billion in value this year.
  • JPMorgan CEO Jamie Dimon has been a vocal critic of Bitcoin, calling it a “fraud” in 2017 and “useless” last October.

In a surprising disclosure last Wednesday, investment banking giant JPMorgan released a report to its biggest clients touting Bitcoin as their preferred alternative asset for investors over real estate, physical gold, fine art or any other type of asset. alternative. Generally speaking, alternative assets are anything other than cash, bonds, or stocks. Bitcoin’s designation as the uber-alt asset is surprising for a few reasons.

Massive Cryptocurrency Collapse Has Shaken Investors

Following the macroeconomic conditions of high inflation, rising interest rates, and commodity shortages that appeared to trigger the $50 billion collapse of Terra (LUNA) and its TerraUSD (UST) stablecoin, the entire cryptocurrency market loss rose to more than $50 billion. $500 billion in a few short weeks. Last November, the cryptocurrency market valuation was over $3 trillion, and as of press time, it was $1.26 trillion, according to CoinMarketCap.

However, despite this sale, media reports from JPMorgan’s client note are bullish on cryptocurrencies and Bitcoin in particular, stating that BTC is currently undervalued by 28% and needs to trade at $38,000 on cryptocurrency exchanges to have a fair price.

“Last month’s cryptocurrency market correction looks more like a capitulation from last January/February, and going forward we see an upside for Bitcoin and cryptocurrency markets in general,” said JPMorgan Chief Strategist Nikolaos Panigirtzoglou, in media articles.

JPMorgan CEO Has Been a Bitcoin Critic for Years

Jamie Dimon has never been a fan of cryptocurrencies or Bitcoin – calling Bitcoin a “fraud” in the past and “useless” last October. However, he said that clients are interested in holding crypto assets despite their personal opinions, so JPMorgan is committed to fulfilling client requests, which is one of the drivers of this new designation of Bitcoin as a preferred investment asset. .

Another reason for JPMorgan’s Bitcoin recalibration cited in the report is “potential lagged revaluation” in corporate bonds, stocks and property, suggesting that these assets could decline in the coming months. At press time, Bitcoin price is up 3.5% to over $30,300, according to CoinMarketcap.

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