The trajectory of the cryptocurrency market took a turn when a top-tier US investment bank announced its intention to replace real estate with cryptocurrency as its better alternative asset. The investment bank, JPMorgan, noted that Bitcoin has become increasingly undervalued, especially coming after the crypto crunch that was witnessed in the market.
The present price of Bitcoin stands at around $29,537 ($A41,637), but JPMorgan sustains it at $US38,000 ($A53,572). Notably, this figure is based on bitcoin’s volatility being four times that of gold, but the banking giant revealed that if the volatility differential was reduced to three times, the fair price would likely move to $US50,000 ($A70,526).The financial company has also revealed that its long-term theoretical target for bitcoin has been raised from $US146,000 ($A205,919) to $US150,000 ($A211,561) in 2021.
Thus, the investment bank has revealed its intention to support cryptocurrency over other assets like real estate. In a statement released to clients, the bank’s strategists team, which is headed by Nikolaos Panigirtzoglou, it was revealed that the bank has started to place a higher value on cryptocurrency than other assets like real estate. Nikolaos noted that “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.”
Nikolaos noted that while digital assets have fallen in value and the “public markets already price in significant recession risks,” especially coming after the fall of terraUSD, there is a higher chance that some other alternative assets, like private debt, private equity, and real estate, may have lagged somehow.
Nikolaos expresses his readiness to invest heavily in digital assets with hedge funds, rather than real estate, as the preferred alternative class. The past weeks have proven to be horrendous for the crypto market and analysts have revealed that the worst is yet to happen for the market. Scott Minerd, Chief Investment Officer at Guggenheim Investments, stated that bitcoin’s value is likely to fall to around $US8000 ($A11,000). This does not seem like a good outing for Bitcoins in the coming days.