Cryptocurrencies are gaining recognition as JPMorgan said in a recent note that real estate has been replaced with digital assets as the bank’s “preferred alternative asset class along with hedge fund.” As per a report by Business Insider, the New York-based financial giant sees bitcoin (EXANTE: Bitcoin) trading below its “fair price” by 28%, suggesting there’s “significant upside” from the current level.
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JPMorgan’s analysts say that 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.”
“We thus replace real estate with digital assets as our preferred alternative asset class along with hedge funds.”
JPMorgan’s statements come after bitcoin shortly dropped below $26,000 as the crypto market lost over $200 billion earlier this month. As of press time, the largest cryptocurrency by market capitalization is trading at $30,000.
In January 2021, JPMorgan downgraded bitcoin’s fair valuation from $150,000 to $38,000 due to high volatility limiting institutional adoption of the crypto. According to the bank’s experts, bitcoin’s pullback from its November all-time high emphasizes the nature of the boom-and-bust cycle, which is an obstacle for institutions to add the cryptocurrency to their portfolios.
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