The banking giant anticipates a rise for Bitcoin, as it believes its current price is well below its “fair value”.
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- JPMorgan projects an increase for the cryptocurrency market.
- The bank switched its real estate investments to the new asset class.
- According to analysts, venture capital funding in cryptocurrencies will prevent a crypto-winter.
The deep correction that the cryptocurrency market is going through has led to Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. to be priced well below its “ fair price “according to analysts at a reputable bank in Wall Street .
El gigante bancario JP Morgan Chase & Co. anticipates a recovery for the major cryptocurrency and the rest of the market. In a report on Wednesday, which was picked up by Forbes y Markets Insider the institution reiterated its estimate of fair price of Bitcoin en USD $38,000 which implies a “ significant advantage “from its current level below $30,000.
In February, JPMorgan had indicated that ” valor justo ” para Bitcoin in a report led by strategist Nikolaos Panigirtzoglou. The estimated level was calculated based on the volatility a statistical measure of dispersion of returns, measured by using the standard deviation or variance between returns from that same security or market index. of the major cryptocurrency compared to gold. At the time, Bitcoin was priced above USD $40,000, but its current price of $29,500 is 28% below the estimate.
Last month’s cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. market an area or arena, online or offline, in which commercial dealings are conducted. correction a correction is a pullback of an asset’s price of at least 10% to adjust for over-valuation. looks more like a capitulation capitulation is the process of selling assets or cryptocurrencies at a significant loss because you have lost hope or belief that it will ever increase in price. relative to last January/February and, going forward, we see an upside for bitcoin and cryptocurrency markets in general.
JPMorgan prefers Bitcoin to real estate
So far in 2022, the digital asset market has been highly volatile, recording a massive correction from the price highs in November. Amid inflation, fears of a recession in the US, interest rate hikes and the complex macroeconomic scenario generated by Russia’s conflict in Ukraine, major cryptocurrencies have plummeted.
Bitcoin has fallen more than 50% from its all-time price high (ATH) above USD $65,000, recorded at the end of 2021. Meanwhile, several major cryptocurrencies are posting even greater losses of up to 80% from their ATHs. El total market value of digital currencies has plunged from USD $3 trillion in November to USD $1.3 trillion in May.
According to the analysis of JPMorgan This downtrend has affected cryptocurrencies more than other alternative investments, such as private equity, private debt and real estate. However, that suggests there is more room for cryptocurrencies to rally, the strategists said in the note, as picked up by Markets Insider.
In its Wednesday note to customers, the bank made mention of a “ delayed potential revaluation ” and said that cryptocurrencies have become his “ preferred alternative asset class “ They have chosen to replace their real estate investments with digital currencies.
“Therefore, we replaced real estate with digital digital technologies are these electronic tools that have the ability to generate, store or even process data. assets as our preferred alternative asset class along with hedge funds.” , dijeron. Cabe señalar que los activos alternativos generalmente se refieren a inversiones que no son acciones, bonos o efectivo.
Venture capital will prevent a crypto-winter
According to reports, the titan of Wall Street also mentioned the recent collapse of the algorithmic stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. of Earth UST, a topic that has been at the center of controversy in crypto space over the past few weeks.
Land USD (UST), an algorithmic stable coin a coin can refer to a cryptocurrency that can operate independently or to a single unit of such cryptocurrency. expected to maintain a price of USD $1, lost its peg a “peg” is a specified price for the rate of exchange between two assets. to the US dollar a few weeks ago. The decoupling knocked down the price of LUNA, that project’s native cryptocurrency, which fell from $80 to zero in a matter of days. The implosion of Earth wreaked havoc in the broader cryptocurrency ecosystem.
In the opinion of the strategists of JPMorgan these dramatic events han “ soured sentiment the sentiment is the overall mood and attitude of traders and investors in regard to a particular asset or the whole market. among many crypto-investors. “, as quoted by Markets Insider . Though they added that, so far, there was little sign of cryptocurrency venture capital funding drying up, a factor they see as crucial to avoid a prolonged cryptowinter.
Of the $25 billion in venture capital capital is most commonly defined as the large sum of money you would use to invest. funding year to date, nearly $4 billion came after [the fall of] Terra . Our best guess is that venture capital funding will continue and a long a situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. winter similar to 2018/2019 will be avoided .
This Wednesday, the venture capital firm a16z announced a new investment fund of USD $4.5 billion, its biggest bet to date, to boost cryptocurrency projects and Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. .
Short a trading technique in which a trader borrows an asset in order to sell it, with the expectation that the price will continue to decline. In the event that the price does decline, the short seller will then buy the asset at this lower price in order to return it to the lender of the asset, making the difference in profit. and long term projections
It is worth noting that, while JPMorgan has shown optimism for the future of Bitcoin -mainly due to their current discount- the report changed cryptocurrencies to from a rating of “cryptocurrencies of the past” to “cryptocurrencies of the present”. overweight ” to a “infraponderación“, lo que significa que el banco ahora está menos interesado en la clase de activos y recomienda una exposición menor en una cartera de inversión.
The level below the $40,000 level the bank estimates for Bitcoin is short-term. In their February report, the strategists from JPMorgan had already identified a theoretical long-term goal for Bitcoin 150,000 US dollars .
- 55% of JPMorgan Chase bank clients believe Bitcoin will be worth more than USD $60,000 by 2022
- Bill Gates reitera su escepticismo por Bitcoin, dice que no tiene “valor de producto”
- Economist Harry Dent predicts Bitcoin’s fall to USD $3,000 and that many years later it will reach USD $500,000.
Article by Hannah Estefania Perez / DiarioBitcoin
Imagen de Unsplash
