Strategists from JPMorgan Chase (JPM), the US banking giant, have argued that BTC’s fresh rally has supposedly soared past what they estimate to be its intrinsic value. The aforementioned analysis was reported by Bloomberg yesterday.
The strategists purportedly include JPMorgan global market strategist Nikolaos Panigirtzoglou. The strategists judge that the topmost cryptocurrency by market cap has lately been trading in a manner that mirrors its late 2017 rally. It is to be noted that the 2017 rally preceded a prolonged price crash.
To make sure the digital asset’s intrinsic value, the strategists allegedly analyzed BTC as a commodity. Subsequently, they calculated its cost of production based on various parameters like electricity costs, estimated computational power, and hardware energy efficiency, as noted by Bloomberg.
Notably, Bitcoin has seen a renewed lease of life since April. Furthermore, BTC has traded as high as almost $8,300 within the last week. It was traded sideways below $5,000 during the period of February and March. In mid-December 2018, BTC had traded below the $3,300 mark. Its present price point is thus representing an approximately one hundred and fifty percent increase over its bear market lows.
In an evident prerequisite of their analysis, JPMorgan’s strategist is cited by Bloomberg as mentioning that defining an intrinsic or fair value for any digital asset or cryptocurrency is undoubtedly difficult. Without a doubt, there are different views among different researchers. Some researchers argue that BTC has no fundamental value while others estimate fair values well in excess of present prices.
As reported, Jamie Dimon has long adopted a disbelieving point of view toward decentralized virtual currencies like Bitcoin. Nonetheless, he is steering the big bank toward initiating its own blockchain-powered native settlement digital asset dubbed, JPM Coin.