Bitcoin has shot above the intrinsic value during the last rally, according to a JPM strategist
The strategists of the US banking giant JPMorgan Chase (JPM) have argued that the recent rise in bitcoin (BTC) has seemingly exploded beyond what they calculate as its intrinsic value. His analysis was reported by Bloomberg on May 20.
The strategists, who reportedly include JPMorgan global market strategist Nikolaos Panigirtzoglou, judge that the main currency has recently been traded in a manner that reflects its rally at the end of 2017, which preceded a prolonged price drop.
Bloomberg points out that to determine the intrinsic value of the currency, strategists analyzed bitcoin as a commodity and calculated its cost of production based on parameters such as estimated computational power, electricity costs and hardware energy efficiency. According to reports, they stated the following:
“In recent days, the real price has moved strongly on the marginal cost. This divergence between real and intrinsic values entails some echoes of the rise at the end of 2017, and at the moment when this divergence was resolved mainly by a reduction in real prices”.
Bitcoin, which has seen its life renewed since April, has traded at almost $ 8,300 in the last week, and has traded below $ 5,000 in February and March. By mid-December 2018, the top currency had traded below the $ 3,300 mark, with its current price, representing a gain of approximately 150% above its bear market minimums.
In an apparent rating of his analysis, Bloomberg cites JPMorgan strategist for pointing out that:
“Defining an intrinsic or fair value for any cryptocurrency is clearly a challenge. In fact, the points of view vary from some researchers who maintain that it does not have a fundamental value, to others that estimate reasonable values well above the current prices”.
As reported, JPMorgan CEO Jamie Dimon has long adopted a skeptical stance towards decentralized cryptocurrencies such as bitcoin, even as he directs the megabank towards the launch of its own blockchain-based digital asset, JPM Coin.
The traditional finance industry does not see the time to try to seize this revolutionary way of creating wealth, open to any user, blockchain-bicoin technology, has the potential to start the process of solving major problems that afflict modern societies, as: corruption, waste, and social injustice, time and innovation can be the way to create new ways to generate opportunities. It is waiting for new announcements.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.