Strategists at JPMorgan Chase led by Nikolaos Panigirtzoglou have revealed they see Bitcoin’s current “fair value” at around $38,000, roughly 12% below its current price, while their theoretical BTC price target is at $150,000.
According to Bloomberg, the strategists calculated the cryptocurrency’s fair value based on its volatility. They got to the $38,000 mark as BTC is roughly four times as volatile as the precious metal, according to a note the analysts published. If the volatility differential were to narrow to three times, the fair value of the cryptocurrency would hit $50,000.
Bitcoin is currently trading above the $43,000 mark, above its supposed current fair value. The strategists’ theoretical long-term BTC price target is $150,000, up from the $146,000 projection seen last year.
The analysts added there are challenges ahead for BTC:
The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption
The strategists added that BTC’s price correction in January appears to look less like capitulation than the one seen last May, but noted that metrics like futures open interest and reserves on exchanges point to a more “long-standing and thus more worrisome position reduction trend.”
As CryptoGlobe reported, BTC surpassed a key technical indicator after going over the $42,800 mark, where its 50-day moving average was after enduring a downtrend since November of last year, when BTC hit a new high near $69,000.
In a report published by Fidelity Digital Assets, the multinational brokerage giant has argued that Bitcoin is a “superior form of money” that could be the “primary monetary good” and that its technological breakthrough was based on that superiority, and not as a superior payment technology.
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