Bitcoin is within the early stages of a price recovery, based on strategists at JPMorgan Chase, who claim that the cryptocurrency has “significant upside potential” following probably the most severe crashes in its history.
The value of bitcoin returned above $30,000 on Monday, marking a 15 per cent increase from the 18-month low it hit in mid May.
In a note to investors last week, JPMorgan strategists wrote that $38,000 currently represented the fair market value for bitcoin – roughly 25 per cent up from today’s price.
“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 note stated.
The researchers on the banking giant also noted that bitcoin and other cryptocurrencies like Ethereum (ETH) and Cardano (ADA) were favoured over tangible assets like real estate.
“We thus replace real estate with digital assets as our preferred alternative asset class together with hedge funds,” the strategists wrote.
The most recent forecast is available in contrast to previous statements from JPMorgan CEO Jamie Dimon, who dismissed bitcoin last 12 months by claiming that it has “no intrinsic value” and faces the prospect of being regulated “the hell out of” within the US.
“I’m not a bitcoin supporter. I don’t care about bitcoin. I even have no real interest in it,” Mr Dimon said in the course of the Wall Street Journal CEO Council summit last May.
“However, clients have an interest, and I don’t tell clients what to do.”
Greater than $1.5 trillion has been wiped from the general crypto market because it reached record highs last November, with bitcoin alone seeing a drop of greater than 60 per cent over the past six months.
The downturn saw a well-liked crypto market sentiment rating fall to its lowest level since 2019, with the Bitcoin Fear & Greed Index registering “extreme fear”.
The index, which measures sentiment using data from cryptocurrency exchanges, social media posts and market momentum, is utilized by some investors and traders as an indicator of whether to purchase, sell or hold.
“Historically, buying into extreme fear levels in bitcoin has been a profitable strategy,” Sam Kopelman, a manager on the cryptocurrency wallet Luno.
“That said, bitcoin has also seen continued sell-offs following a fearful market sentiment. Investors must keep in mind that past performance is just not indicative of future price movements. Subsequently, as investors begin to re-enter the market, they need to remain wary.”