Bitcoin's Market Price Is Above Its Intrinsic Value, Says JPMorgan

  • JPMorgan analyst note claims bitcoin's intrinsic value is still below its current market price.
  • Analysts found an increase in interest from institutional clients in anticipation of CME Group options. 

A new report by JPMorgan claims the intrinsic value for bitcoin is still below its current market price, providing some “downside risk” for investors. 

According to the note published Jan. 10 and reported by Bloomberg, the market price for the flagship cryptocurrency is trading above its calculated intrinsic value. JPMorgan strategist Nikolaos Panigirtzoglou wrote in the note, 

The market price has declined by nearly 40% from its peak while the intrinsic value has risen by around 10%...the gap has not yet fully closed, suggesting some downside risk remains.

However, the report explained that institutional interest in bitcoin-related contracts appears to be on the rise, with high anticipation for the launch of CME Group Inc. options. Panigirtzoglou said there “has been a step increase in the activity of the underlying CME futures contract,” in the days leading up to the launch of options trading, culminating in a 69 percent increase from the end of 2019.

He continued, 

This unusually strong activity over the past few days likely reflects the high anticipation among market participants of the option contract.

Featured Image Credit: Photo via Pixabay.com