Bitcoin to Return to Fair Value Price Around $38,000

Analysts at popular U.S. investment bank JPMorgan predict that Bitcoin will overturn current bearish sentiments to return to its fair value price. According to a note released to investors on Wednesday, the bank claimed that bitcoin’s fair value price is $38,000, a figure that is approximately 28% higher than Bitcoin’s current market price around $29,700.

The note, co-authored by the bank’s strategist Nikolaos Panigirtzoglou, claims that the recent decline in bitcoin prices, as well as the broader crypto market, is a sign of capitulation. Hence, JP Morgan’s analysts predict that there is a “significant upside from here” for Bitcoin and cryptocurrencies.

“The past month’s crypto market correction looks more like capitulation relative to last January/February and going forward we see upside for bitcoin and crypto markets more generally,” the Wednesday note reads.

JP Morgan: Cryptocurrencies Now a Preferred Alternative Asset

The dramatic fall in the price of cryptocurrencies coincides with a broader correction across most financial markets. Under current macro conditions, cryptocurrencies have largely underperformed when compared to other alternative assets such as real estate and equity debt.

However, JPMorgan’s analysts are optimistic that cryptocurrencies offer an asymmetric return opportunity and will rebound faster than other alternative asset classes.

“We thus replace real estate with digital assets as our preferred alternative asset class along with hedge funds,” the analysts wrote in Wednesday’s note.

While touting an upside for cryptocurrencies, analysts also mentioned that the current state of the financial market requires switching exposure to alternative assets from “overweight” to “underweight.” Investors must remain wary of a possible continued downtrend in alternative assets, especially if current market conditions worsen.

Meanwhile, Bitcoin’s current market price under $30,000 means the leading crypto asset is trading more than 60% below its November all-time high around $68,000. The total market capitalization of all cryptocurrencies have similarly declined from $3 trillion to $1.3 trillion at the time of writing.