JPMorgan: Bitcoin is currently overvalued
JPMorgan’s group of strategists believes Bitcoin is overvalued by about 13% and should cost $38,000. In addition, cryptocurrency today is about four times more volatile than gold. Blockworks wrote about the report.
According to the report, bitcoin’s biggest challenge in the future would be its instability and the rise and fall cycles that would prevent its further institutional adoption. “In an upside scenario”, the report said, “[bitcoin’s] fair value would be $50,000.”
Strategists, however, predict the BTC rate will reach $150,000 in the long run.
Some cryptocurrency proponents say JPMorgan’s strategists misunderstand bitcoin’s volatility as a weakness. “The main problem with JPMorgan’s argument is that JPMorgan thinks that bitcoin’s volatility will make it more difficult to adopt,” says Leah Wald, CEO of Valkyrie Investments.
The bank’s report comes as the correlation between cryptocurrencies and stocks continues to tighten. However, it is worth adding that this is a trend that threatens the historical status of bitcoin as an uncorrelated asset.
However, Data from CryptoQuant suggest that bitcoin’s value is undervalued at the moment. The Network Value to Transactions (NVT) ratio – a commonly used basic metric – has fallen below a decade.
The market capitalization divided by the volume of transfers provides an indicator of whether coins are overvalued or undervalued.
Analysts have noted that the amount of bitcoins leaving exchanges continues to grow, which traders often see as a sign of a bull market.
As of today, one bitcoin costs about $44,000. This represents a 18% increase on a weekly basis. Since yesterday, the digital currency’s price has increased by 0.6%.
Ether, the leading altcoin, increased to $ 3,187. This is a 19.6% increase over the last week.