HOW MUCH CAN BITCOIN RISE AFTER ITS COLLAPSE ON WALL STREET?

 

One entity noted that cryptocurrencies overtook real estate as one of its “alternative assets”

The North American bank JP Morgan expressed that the fair price of Bitcoin is 28% higher than its current level, which implies a “significant upward movement from here” after a dramatic sale of cryptocurrencies.

The bank noted in a note Wednesday that cryptocurrencies have overtaken real estate as one of its preferred “alternative assets,” meaning assets that don't fall into typical categories like stocks and bonds.

JP Morgan noted that it stood by its view that $38,000 was a fair price for Bitcoin. This figure is 28% higher than the $29,500 level of the leading cryptocurrency on Wednesday.

“Last month’s crypto market correction looks more like a capitulation relative to last January/February and going forward we see an upside for Bitcoin and crypto markets in general,” the strategists said. of the bank, including Nikolaos Panigirtzoglou, in the note.

Cryptocurrencies have fallen in 2022 as rising inflation and interest rates, the war in Ukraine and a slowdown in China prompted investors to dump assets deemed risky.

Bitcoin lost around 37% for the year, while Ethereum tumbled roughly 48%. The total market value of all cryptocurrencies plummeted from about $3 trillion in November to $1.3 trillion in May.

However, JPMorgan warned that the sell-off had hurt cryptocurrencies more than other alternative investments such as private equity, private debt and real estate. That suggests there is more room for cryptocurrencies to recover, strategists anticipated in the report.

“Therefore, we substitute real estate for digital assets as our preferred alternative asset class alongside hedge funds,” they wrote.

The dramatic collapse of the stablecoin TerraUSD and the connected cryptocurrency LUNA had soured sentiment among many crypto investors, the strategists said. However, they added that so far there is little sign that venture capital funding in crypto is drying up.

However, the investment bank said it was now less interested in alternative investments, changing them to an "underweight" rating from "overweight" previously.