JPMorgan sees upside for bitcoin after recent washout
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According to Nikolaos Panigirtzoglou, JPMorgan strategist, Bitcoin investors were swept up by the market chaos this year. However, those who are still sticking with the currency should anticipate at least 30% upside from the crypto. The fair value of bitcoin is $38,000, which is about 32% upside from its current trading price. Friday, at 12:02 p.m. ET. ET it traded around $28,687. In February when both bitcoin and other risk assets were falling, the strategist stated the exact same thing. Panigirtzoglou wrote in a note this Wednesday that “the bitcoin to gold vol has fallen modestly towards 4x”, which would in our framework suggest an unchanged fair value around $38,000, which would indicate significant upside in digital assets from there.” An alternative asset type Panigirtzoglou stated digital assets as his preferred asset class, along with hedge fund funds. Panigirtzoglou explained that the market has already priced in risks of recession while digital assets underwent repricing due to the recent collapse of TerraUSD. He said that a potential lagged repricing makes us cautious about private equity, debt, and real estate in the next quarters. Bitcoin hit its longest-ever weekly losing streak — eight weeks — this month and market sentiment has been dismal amid a broader sell-off in risk assets this year and the stunning blow-up of one of crypto’s most popular projects , TerraUSD. Most observers and crypto investors came to the market in or shortly after the 2018-2019 Crypto Winter. Bitcoin’s value has nearly halved in the year since it reached its record high of $68,982.20, which was set in November. After the Terra crash, it traded in tight ranges this year. It then fell below $30,000 for the month. Panigirtzoglou stated that venture capital financing of crypto projects was crucial for the digital asset markets and could prevent a prolonged “crypto winter”. Many experienced crypto investors believe that bearish periods in the market are best for creating new projects and preparing for the next bull cycle. Panigirtzoglou stated that there has been no evidence to suggest that VC funding is drying up after Terra’s collapse. Nearly $4 billion of the $22.5 billion in VC funding YTD went after Terra. It is our best guess that VC funding will continue. A long winter, similar to 2018/2019, would not be prevented.
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