JPMorgan Now Backs Bitcoin And Says Crypto Is Its Preferred Asset

May 26, 2022 11:24 am

JPMorgan just made a public statement that indicated that there was significant upside for Bitcoin and that current price levels may be a good opportunity for investors to jump in again.

The note from the bank specifically states that the company actually prefers cryptocurrencies as an alternative asset over real estate.

This was quite impressive given that real estate is often considered one of the most low-risk investment assets that large financial institutions prefer.

Currently, the firm is saying that it believes the fair price for Bitcoin as of today should be around $38k which is about 28% higher than the current market price.

Yahoo reports:

“The past month’s crypto market correction looks more like capitulation relative to last January/February and going forward we see upside for bitcoin and crypto markets more generally,” the bank’s strategists, including Nikolaos Panigirtzoglou, wrote in the note.

Cryptocurrencies have tumbled in 2022 as rising inflation and interest rates, the war in Ukraine, and a slowdown in China have caused investors to ditch assets deemed to be risky.

Bitcoin is down about 37% for the year, while ethereum has tumbled about 48%.

The total market value of all cryptocurrencies has plunged from about $3 trillion in November to $1.3 trillion in May.

But JPMorgan said the sell-off had hurt cryptocurrencies more than other alternative investments, such as private equity, private debt, and real estate. That suggests there’s more room for cryptos to rebound, strategists said in the note.

The change in preference for alternative assets stems from the reasoning that there is much more upside for digital assets in the current market environment than real estate.

Alternative assets are often considered assets that aren’t as popular and fall under mainstream categories such as stocks and bonds.

The increased focus in investment in this asset and the continued optimism seems to be a good sign despite the recent UST collapse which temporarily shocked the crypto industry.

Current data shows that venture capital for the industry is still going strong while it has started to dry up for other industries.

MSN.com reports:

“We thus replace real estate with digital assets as our preferred alternative asset class along with hedge funds,” they wrote.

The dramatic collapse of the TerraUSD stablecoin and connected luna cryptocurrency had soured sentiment among many crypto investors, the strategists said.

But they added that there was so far little sign that venture-capital funding into crypto was drying up.

But the investment bank said it was now less keen on alternative investments, switching them to a ranking of “underweight” from “overweight” previously.

Besides Bitcoin, other digital assets might soon also become preferred alternative assets for financial institutions to allocate their capital to.

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