JPMorgan Sees 28% Upside For Bitcoin: Report

Banking giant JPMorgan said in a note Wednesday that bitcoin and cryptocurrencies are now amongst its preferred “alternative” investments, Markets Insider reported.Assets considered as dangerous, which typically consists of bitcoin in the minds of professional and institutional investors, have actually plunged in 2022 amid tighter monetary policies and several decades-high inflation numbers in the U.S. and around the world.Bitcoin and equities have broadly toppled so far this year against a background of less liquidity on the marketplace and low potential customers for the Russian-Ukrainian war to come to a close anytime soon. Image source: TradingView.However, Bitcoins high sell-off, in addition to that of other cryptocurrencies, has actually been more profound that in other alternative investments such as private equity, personal debt, and property, JPMorgan reportedly said. For that reason, the bank pictures more room for rebound in the “digital assets” class than in other alternative possessions.”We therefore replace realty with digital assets as our favored alternative property class together with hedge funds,” the banks strategists composed, per the report.JPMorgans strategists reportedly said in the note that the bank was sticking to its view that $38,000 was a reasonable price for bitcoin– about 27.5% greater than its $29,798 price at press time on Wednesday early morning. Bitcoins affordable evaluation becomes part of the reason why the bank has a more optimistic outlook for the digital currency going forward.”The past months crypto market correction looks more like capitulation relative to last January/February and going forward we see upside for bitcoin and crypto markets more usually,” the note said, per the report.Despite the greater beauty of the sector, JPMorgan reportedly said in the note that it has changed Bitcoin and cryptocurrencies from an “obese” ranking to a “underweight” one– meaning that the bank is now less eager on the asset class and suggests a lower direct exposure in an investment portfolio.

Other Questions People Ask

What does JPMorgan's report say about the potential upside for Bitcoin?

JPMorgan's report indicates that Bitcoin has a potential upside of approximately 28%, projecting a reasonable price target of $38,000 compared to its current price of around $29,798. The bank's strategists believe that the recent sell-off in Bitcoin and other cryptocurrencies has created a significant opportunity for rebound, especially as these digital assets are now viewed more favorably than other alternative investments like real estate. This optimistic outlook is partly due to Bitcoin's relatively affordable valuation in the current market.

How has JPMorgan adjusted its stance on Bitcoin and cryptocurrencies?

JPMorgan has recently downgraded its rating on Bitcoin and cryptocurrencies from "overweight" to "underweight," suggesting a more cautious approach towards this asset class. Despite this shift, the bank still acknowledges the potential for recovery in the digital asset market, especially given the significant price corrections observed. The strategists emphasize that while they are less enthusiastic about immediate exposure, they see long-term upside potential for Bitcoin and the broader crypto market.

What factors contributed to JPMorgan's positive outlook on Bitcoin?

The positive outlook from JPMorgan is influenced by the recent market corrections that they interpret as a capitulation phase, which often precedes recovery. The bank notes that Bitcoin's decline has been sharper compared to other alternative investments, indicating more room for rebound. Additionally, the strategists highlight that Bitcoin's current valuation presents an attractive entry point for investors looking to capitalize on future growth in the cryptocurrency market.

Why does JPMorgan prefer digital assets over real estate as an investment class?

JPMorgan has shifted its preference from real estate to digital assets as a favored alternative investment class due to the significant sell-off in cryptocurrencies compared to other assets. The bank's strategists believe that digital assets like Bitcoin offer greater potential for recovery and upside in the current economic climate. This change reflects a strategic pivot in response to market conditions, where cryptocurrencies are seen as having more favorable risk-reward dynamics than traditional real estate investments.