JPMorgan thinks Bitcoin is overvalued at this stage

jpmorgan-1 JPMorgan thinks Bitcoin is overvalued at this stageAmerican banking and investment giant JPMorgan believes that at the current BTC price (quotation in real time), the largest cryptocurrency in the world seems overrated. In its recent investor report, the bank said Bitcoin's fair value is $ 35.000 according to the bank's pricing model.

It means that JPMorgan expects the price of BTC to be almost 50 percent of its current price. However, the bank strategists also added that a price target of $ 73.000 for Bitcoin seems reasonable if volatility continues to extend into next year. As reported by the bank, the American multinational noted:

"This challenges the idea that a price target of $ 100.000 or higher, which appears to be the current consensus for 2022, is a sustainable Bitcoin target in the absence of a significant drop in Bitcoin volatility."

Although JPMorgan believes the current entry point is "unattractive", it remains bullish on a multi-year front. But it still does not recommend cryptocurrency as an investor "main holding" due to its high volatility.

Cryptocurrencies will continue to outperform in 2022

In its investor report, JPMorgan said the banking giant has focused on some alternative investments that also include digital assets. The banking giant also noted that alternative asset classes such as private debt and private equity will return 11% returns next year. This will be more than double the 5% returns on equities and fixed income.

JPMorgan analysts talked about the recent volatility in September after a strong rally in August. However, since the end of September, the overall valuations of the cryptocurrency market have risen by 30% so far. Currently, the global cryptocurrency market cap fluctuates just above $ 2,75 trillion.

New ATHs for cryptocurrencies?

The recent rally over the past month comes against the backdrop of strong optimism surrounding the launch of the first Bitcoin futures contracts. Since the September close of around $ 42.000, BTC's price has gained nearly 50% and is currently trading near its all-time high. But the bank strategists also recently warned that Bitcoin Futures ETFs could come at a cost.

However, banking strategists still believe that Bitcoin remains a better inflation hedge than gold. "The re-emergence of inflation concerns among investors has renewed interest in using Bitcoin as an inflation hedge," the bank's analysts wrote. Over the past year, Bitcoin has outperformed gold by enormous value, truly becoming "digital gold".

However, Jamie Dimon, head of JPMorgan and critic of Bitcoin, continues to hold his anti-Bitcoin stance. Dimon said that even if the price of Bitcoin were to increase 10 times over the next decade, he would not invest in it. He also called the largest cryptocurrency in the world "worthless".