JPMorgan claims bitcoin massively undervalued right now

The current bitcoin price is around $29,537, but JPMorgan maintains $38,000 is a fair price for the cryptocurrency

A major US investment bank has revealed it is replacing real estate with cryptocurrency as its preferred alternative asset.

JPMorgan has claimed bitcoin is massively undervalued right now, following a shocking few weeks for the cryptocurrency, with the banking giant saying its fair price is 28 per cent higher than its current level.

The current bitcoin price is around $29,537, but JPMorgan maintains $38,000 is a fair price for the cryptocurrency, a figure it originally set back in February.

This number is based on the premise that bitcoin is around four times more volatile than gold, but noted that if the volatility differential narrows to three times then the fair price would rise to $50,000.

JPMorgan’s long-term theoretical target for bitcoin rose to $150,000, up from $146,000 in 2021.

In a note to clients, the bank’s strategists, led by Nikolaos Panigirtzoglou, revealed the bank had begun placing higher value on cryptocurrency over other assets such as real estate.

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 note stated.

While public markets already price in significant recession risks, and digital assets have repriced significantly following the collapse of terra USD (UST), some alternative assets such as private equity, private debt and real estate appear to have lagged somewhat.

We thus replace real estate with digital assets as our preferred alternative asset class along with hedge funds, the note stated.

This follows a few weeks of big drops in cryptocurrency, with market analysts warning the worst is yet to come.

Guggenheim Investments chief investment officer Scott Minerd has warned that bitcoin, is set to drop down to just $8000 in value.

Were that to happen, it would mean the blockchain would shed around 70 per cent of its current value.

When you break below $30,000 consistently, $8000 is the ultimate bottom, so I think we have a lot more room to the downside, Minerd told CNBC.

However, in some good news, the CIO also said that while most crypto is “junk”, bitcoin and ethereum will survive.