• Wed. Jun 22nd, 2022

JPMorgan sees price rise 28% as it backs crypto

ByHazel R. Lang

May 25, 2022
  • JPMorgan said it believes bitcoin’s fair price is 28% higher than its current level, saying it sees opportunities in the crypto markets.
  • Cryptocurrencies fell dramatically in 2022 as investors dumped riskier investments as storm clouds built.
  • But JPMorgan said it sees a “benefit” for the bitcoin and crypto markets more generally after the sale, making digital assets a preferred alternative investment.

JPMorgan said bitcoin’s fair price was 28% higher than its current level, implying “significant upside from here” after a dramatic selloff in cryptocurrencies.

The bank said in a note Wednesday that cryptos have overtaken real estate as one of its favorite “alternative assets” — assets that don’t fall into typical categories like stocks and bonds.

He said he stands by his view that $38,000 is a fair price for bitcoin. That figure was 28% higher than bitcoin’s $29,722 level on Wednesday morning.

“Last month’s crypto market correction looks more like a capitulation compared to last January/February and looking forward, we see an upside for bitcoin and crypto markets more generally,” the strategists said. of the bank, including Nikolaos Panigirtzoglou, in the note.

Cryptocurrencies tumbled in 2022 as rising inflation and interest rates, war in Ukraine and a slowdown in China pushed investors out of assets deemed risky.

Bitcoin is down around 37% for the year, while Ethereum is down around 48%. The total market value of all cryptocurrencies rose from around $3 trillion in November to $1.3 trillion in May.

However, JPMorgan said the selloff hurt cryptocurrencies more than other alternative investments such as private equity, private debt and real estate. This suggests there is more room for cryptos to rebound, the strategists said in the note.

“We are thus replacing real estate with digital assets as the preferred alternative asset class with hedge funds,” they wrote.

The dramatic collapse of stablecoin TerraUSD and connected cryptocurrency luna has embittered many crypto investors, strategists said. But they added that there are so far few signs that venture capital funding in crypto is drying up.

However, the investment bank said it was now less inclined towards alternative investments, dropping them from an “underweight” to “overweight” rating previously.


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