According to JPMorgan, Bitcoin’s “fair price” is up to 12% below its current price due to its high volatility compared to gold.
Strategists led by Nikolaos Panigirtzoglou shared a notable Bitcoin analysis in a note on Tuesday. The bank said the analysis was done on the assumption that BTC is four times more volatile than gold. In this scenario, they said, the value of Bitcoin would be a quarter of $150,000, or $38,000. But if Bitcoin were only three times as volatile as gold, its fair value would be around $50,000, they added.
Additionally, JPMorgan’s long-term price target for Bitcoin has been updated to $150,000 from last year’s target of $146,000. While making this estimation, it was assumed that Bitcoin amounts have the same weight as gold in investor portfolios. However, the bank considers that this target is unlikely to be achieved anytime soon, given that this is unlikely to happen in the near future.
Bitcoin had a rough start to the year as the appetite for risky assets weakened in the face of high inflation and the Federal Reserve’s increasingly hawkish stance. The leading cryptocurrency fell below $36,000.
One of the biggest drivers for crypto over the past two years has been the massive amounts of cheap cash from fiscal and monetary stimulus programs during the pandemic, and much of that now seems to be coming to an end.
However, strategists noted that the biggest challenge for Bitcoin is volatility, as it is generally not attractive to institutional investors.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.