Bitcoin is undervalued by 28% according to JP Morgan
Bitcoin is undervalued by 28% according to JP Morgan
Bitcoin

Bitcoin is undervalued by 28% according to JP Morgan

By George Michael Belardinelli - 26 May 2022

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Investment bank JP Morgan and its team say they are confident about Bitcoin, stating that the current value is undervalued

JP Morgan’s analysis of Bitcoin’s value

bitcoin present value
According to the Big Four JP Morgan, Bitcoin appears to be undervalued by 28% compared to its fair value

According to their estimates, in fact, the currency’s fair value is confirmed to be $38,000, which is the same value they assigned to it in February, but with one difference: in February, BTC was at $43,000, while today it is around $29,000. 

Compared to its current value, therefore, BTC seems to be undervalued by 28% and this is a breath of optimism for investors. The concern stems from recent statements by some experts who see Bitcoin spiralling towards new lows, such as Scott Minerd who predicts a descent towards $8,000.

Nikolaos Panigirtzoglou of JP Morgan and his team reported that:

“Last month’s cryptocurrency market correction looks more like capitulation than last January / February and moving forward we see an upside for the bitcoin and cryptocurrency markets more broadly. VC’s funding trajectory would be crucial to help the cryptocurrency market to avoid the long winter of 2018/2019”.

Bitcoin is currently trading at a price that represents less than half of its all-time high and a long way from forecasts that see it destined to reach $100,000, but there have been some unforeseen bumps in the road and they have weighed heavily. 

The causes of Bitcoin’s depreciation

Among the problems that have held back BTC, apart from the war in Ukraine, are the rise in interest rates following monstrous inflation, as well as the collapse of the stablecoin UST and the crypto LUNA, which led to a drop in market capitalization of $50 billion.

The total capitalization of the crypto world has fallen from $3 trillion in November to $1.3 trillion today: a truly impressive drop.

However, there are signs of change: for example, Starkware, an Ethereum startup has raised $100 million with a valuation of $8 billion and Andreessen Horowitz has announced an allocation of $1.5 billion for cryptocurrency investments to boost its $4.5 billion fund.

Analysts state that:

“So far there is little evidence that VC funding has dried up the collapse of Earth. Of the $ 25 billion in VC funding since the beginning of the year, nearly $ 4 billion has come after Earth. Our best guess is that VC funding will continue and a long winter similar to 2018/2019 would be avoided”.

A breath of fresh air for Bitcoin and crypto in general, or at least a certainly positive outlook of hope compared to the recent fears of some analysts who saw BTC and other cryptocurrencies facing an abyss. 

George Michael Belardinelli

A former corporate manager at Carifac Spa and later at Veneto Banca Scpa, blogger and Rhumière, over the years he has become passionate about philosophy and the opportunities that innovation and the media make available to us, in particular the metaverse and augmented reality

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