JPMorgan strategists have been cautioning Bitcoin investors even though bitcoin has been experiencing an ongoing bullish trend. Bitcoin has been indicating the same fundamental value as it did in 2017’s price surge.
Bitcoin is currently trading within the eight thousand dollars mark ($8000). It hit this price level after an outstanding performance on the charts in April.
This was the moment when the eighteen-month-long crypto winter came to an end. Despite this bullish run the JP Morgan strategists are trying to convince Bitcoin investors to turn away from investing in the coin.
J.P. Morgan is an investment bank and financial services company. It is notorious for being the largest bank in the United States and is the sixth largest bank globally in terms of assets.
According to JPMorgan strategists, the Bitcoin price surge means that the asset is being overpriced. In order to validate their paranoia, they are using the fundamental value of Bitcoin as a bait. The JPMorgan strategists believe that the fundamental value of Bitcoin is made by overhyping the coin’s worth calculating its ‘cost of production.’
JPMorgan strategists think that the price has moved up over to marginal cost. This deviation of the real and fundamental value is mirroring the surge of Bitcoin in 2017. In 2017, the matter was brought under control by reducing the actual prices.
What the JPMorgan strategists forget is that bitcoin cannot be treated like just another commodity. This is mainly because it is predictable, stable and constant no matter the market demand.
JPMorgan strategists are showing a pattern in their behaviour. They did the same exact thing in February around the time Bitcoin was near the four thousand dollars ($4000) level.
Mati Greenspan, senior market analyst at EToro commented on the matter. He stated that it is new to see the JPMorgan strategists finally acknowledging that Bitcoin has a fundamental value. He continued by saying that soon they will also understand that miners have a tendency to hoard
As of now, JPM seems to be promoting the idea to not buy bitcoin by presenting half-baked calculations as proof.
