Bitcoin’s ‘Fair Price’ Is $35K But Will Still Outperform – JPMorgan

JPMorgan, the American multinational investment bank, has now put a price tag on Bitcoin. Strangely, the price tag is a lot less than the asset currently trades for.

In a recent report to investors, which was a part of the bank’s inaugural outlook that focused on alternative investments, the bank’s strategists made an interesting projection. They said that alternative assets that include cryptos “should continue to outperform into 2022.”

They also insisted that Bitcoin’s ‘fair value’ is nearly $35,000 according to the company’s price model. This valuation is about 45% lower than its current trading price of $63,100. Nonetheless, a price target of $73,000 appears quite reasonable if volatility continues into 2022. The strategists are aware that these are not the sky-high targets that many expect and they  added:

“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.”

Notably, they suggested that the current entry point “looks unattractive,” but the cryptocurrency assets are on a “multiyear structural ascent.”

In conclusion, the analysts said that the alternative asset class that features private debt and private equity will return around 11% in 2022. That figure is double the 5% gain from the stocks and fixed income. Nonetheless, they never recommended cryptocurrency as a “core holding” due to its volatility.

JPMorgan Worried About Crypto’s Volatility

The JPMorgan strategists insisted that volatility that came in early September after the bullish market activity in August that saw the crypto space surpass $2 trillion in market capitalization by the end of August was the evidence. Around two months later, the market cap has gained by about 35% to top $2.87 trillion, based on data acquired from CoinGecko.

JPMorgan CEO Jamie Dimon said in late September that the prices of Bitcoin could still surge by ten times. However, he is not interested in investing in it. Dimon also said that the asset was ‘worthless’ in the following month.

The JPMorgan retail wealth clients appear to be interested in the crypto and they were granted some access to the digital currency in July. In early last month, JPMorgan strategists said that institutional investors were now favoring Bitcoin over gold as a hedge against inflation.

Morgan Stanley, a Wall Street investment bank, has also been giving analysis on cryptocurrency assets. The bank published a report on November 1 for its wealth management clients highlighting market trends, cryptocurrency industry metrics, and possible regulatory impacts.

Just like JPMorgan, the other major investment banks that are hiring crypto experts include UBS, Citigroup, Morgan Stanley, and Goldman Sachs. All these institutions are seeking the best way to invest in the thriving crypto market, according to reports.