Bitcoin recovered somewhat after price correction
JPMorgan sees fair value below current market levels
Strong volatility in sight
Bitcoin buyers had to put $69,000 on the table in November 2021 to purchase a Bitcoin. The soaring was followed by a sudden correction, which at times pushed the price of the digital currency down to around 35,000 US dollars. In the meantime, Bitcoin has recovered and currently costs around 43,000 US dollars. Too much, JPMorgan experts believe.
advertising
Also benefit from falling prices: Trade cryptocurrencies directly with leverage now.
77% of retail investor accounts lose money when trading CFDs with this provider. You should carefully consider whether you can afford to take the high risk of losing your money
JPMorgan sees fair value below current market levels
In an investor note, JPMorgan analyst Nikolaos Panigirtzoglou sees the cryptocurrency’s fair value at around $38,000. The expert cited the high volatility of Bitcoin as a reason. “The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that impede further institutional adoption,” according to a study by the bank.
According to the study, the specific price estimate results from the fact that Bitcoin is almost four times as volatile as gold. According to the experts, should the fluctuations decrease and the volatility level drops to three times that of the precious metal, the fair value of Bitcoin would rise to $50,000. This value is also far from the highs that BTC was able to reach last fall.
Long-term forecast remains clearly bullish
Notwithstanding the current turmoil and volatility in the crypto market and a fair value quote below current market levels, the JPMorgan analyst team remains significantly bullish on Bitcoin’s price development over the long term. Panigirtzoglou even raised the long-term price target from the original $146,000 to $150,000.
However, given the recent price turbulence, the experts are not really concerned. Bitcoin’s price correction in January “looks less like a capitulation” compared to the price drop in May 2021, when Bitcoin corrected from $60,000 to around $33,000. Still, Panigirtzoglou points out in his study that some BTC metrics, such as futures open interest and exchange reserves, would point to a “prolonged, and thus more worrying, trend to reduce positions.” In the eyes of the experts, the correction is not yet over.
Editorial office finanzen.net
Image sources: ImageFlow / Shutterstock.com, 3Dsculptor / Shutterstock.com