Despite this, the JPMorgan strategies have warned investors outside of Bitcoin, despite the current bull market. According to a recent investor note, Bitcoin has risen ahead of its "intrinsic value" which mirrors the 2017 boom before the 2018 decline.
Naturally, JPMorgan wants to count on Bitcoins parade
Bitcoin price 0 0 has undergone a heroic charge since the beginning of April, signaling the end of the nearly 1
For JPMorgan, encryption price changes mean just one thing – overpricing of assets. To give FUD an air of science, they can even put a figure on it – the "real price". As per JPMorgan, it will process Bitcoin as a commodity and calculate its production cost.
According to the strategies:
Over the past few days, the actual price has sharply exceeded the marginal cost. This difference between actual and intrinsic values gives some echoes of the tip higher at the end of 2017, and at that time, this divergence was solved mostly by a reduction in actual prices.
Of course, JPMorgan omits that Bitcoin does not behave like a commodity as it is not only high capacity, but production is predictable and constant regardless of market demand.
Between the Downturn and the Rally, was it probably a buy signal?
Nothing that JPMorgan could recognize. Although logical, yes, there must have been some point that bitcoin was a purchase. It seems like JPMorgan experts missed it.
In fact, they sang exactly the same tune back in February, when BTC fluctuated around $ 4,000. At that time, JPMorgan's "intrinsic" was just $ 2400, based on "average cash cost of a cheap Chinese mine".
But all that really is mapped here is a rough sketch of the miner's profit margins.
Yet, before that, the people at JPMorgan were incredible that Bitcoin had no "self-worth" at all, except perhaps in a dystopian future scenario.
"Great to see JPM finally admit that Bitcoin has intrinsic value," commented EToro senior market analyst, Mati Greenspan. "Wait till they realize that miners who make a profit tend to start chopping."
JPMorgan Disclaimer: We don't really know "anything"
Many in the mining community have claimed that the very term "marginal cost" or " break-even point "is wrong. With a limited supply, miners can only receive a larger proportion of it than other miners.
JPMorgan refers to the "challenge" to define a "fair value" for the BTC in a warning to the strategy note.
Defining a worthwhile or fair value for any cryptocurrency is clearly challenging. In fact, impressions range from some researchers who argue that it has no basic value, for others to estimate fair value over current prices.
So … "Based on ours, it's pretty little, arbitrary, valuation, not buying bitcoin. Is this what suits professional financial advice these days?
Do you agree with JPMorgan's review of bitcoins current value? Share your thoughts below!
Pictures via Shutterstock, JPMorgan / Bitfinfocharts.com