Altcoin News: JPMorgan: Bitcoin May Have Gotten Ahead of Itself with Its Recent Rally
May 20, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
Analysts at JPMorgan Chase & Co on Friday prepared a note for their customers, which indicated that the largest cryptocurrency was ahead of itself during the current rally, writes Bloomberg.
The market value of Bitcoin exceeded the “intrinsic value,” they argue, adding that a similar trend was observed in 2017 before the rate fell from its historical maximum.
When making the forecast, analysts proceeded from the fact that Bitcoin is an exchange commodity, and calculated the “cost of its production”, based on such variables as computing resources, energy costs and energy efficiency of the equipment.
“In recent days, the real cost has dramatically exceeded the cost,” they write.
This discrepancy between real and intrinsic value has certain similarities with the peak of the end of 2017. Then the discrepancy was eliminated mainly by reducing the actual value.
At the same time, analysts recognize that determining the fair price of Bitcoin is not a straightforward question:
“Defining an intrinsic or fair value for any cryptocurrency is clearly challenging,” the strategists wrote as a caveat. “Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.”
At the end of last year, JPMorgan analysts said about the fall of interest of large investors to the cryptocurrency market, which contradicts, for example, the information of the Grayscale company, which controls the digital assets.
Author: Marko Vidrih
