Financial services giant JP Morgan Chase has once again upped its long-term price prediction for Bitcoin, even as its analysts don’t view short-term fundamentals to be working in its favor.
In a recent investor note, the bank’s analysts estimated Bitcoin’s “fair-value” to currently be $38,000, which is almost 12% lesser than its current market price of around $44,000. This analysis has come even as the top cryptocurrency has registered significant gains over the past few days and is on its way to recovering losses incurred since the beginning of the year.
The $38,000 price point was estimated by a team of strategists led by JPMorgan crypto market analyst Nikolaos Panigirtzoglou, who reached this conclusion due to the digital asset being four times as volatile as gold. They did state that the “fair value” could jump up to $50,000, provided that the percentage of BTC’s volatility is narrowed down to three times, adding,
“The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption.”
While current market conditions may have led to JP Morgan setting a lowered “fair value” for Bitcoin, the analysts have in fact upped their long-term price prediction for the kingcoin. The research note said that BTC could one day reach a price point of around $150,000, up from $146,000 forecasted in January 2021.
Panigirtzoglou’s team also noted that BTC’s current price movement was less akin to a capitulation as it was during the May 2021 market crash, when the asset had plunged almost 50%. However, they added that metrics like futures open interest and exchange reserves indicate that a “more long-standing and thus more worrisome position reduction trend” had begun in November.
After facing lows of below $39,000 earlier this month, Bitcoin had managed to climb back up to $45,000 momentarily yesterday, its highest price point in almost a month, where it has continued to find strong resistance. At press time, the digital asset was changing hands at $44,184 according to CoinMarketCap, having gained 14.32% in the past week.
Another banking giant, Wells Fargo, has also released its own cryptocurrency market outlook in a report recently, stating that global crypto adoption could “soon hit a hyper-inflection point” as “it is still early in the cryptocurrency investment evolution.” It also added that these investments could soon mimic those in other technology sectors, “where adoption rates begin to rise and do not look back.”