Crypto

Bitcoin: Institutionalists Ditch BTC, JPM Estimates, Fair Value $ 35,000 By Investing.com


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Investing.com – Institutional investors are moving away from investment in favor of investment bank JP Morgan released yesterday, reversing a recent trend in the past two quarters, which is an additional factor. This week.

Note that the bank relied on futures contracts on CME to reach these conclusions.

“The Bitcoin scheme continues to deteriorate and indicates an ongoing downturn among institutional investors,” writes JPMorgan (NYSE :) in a note to clients. “Over the past month, the bitcoin futures markets have experienced the strongest and most sustained sell-off since the bitcoin rally began last October.”

JPMorgan noted that some of the recent pressure is likely due to the fact that traders, including crypto funds, are taking profits. The firm noted that the momentum signal for Bitcoin fell further into negative territory for the first time since March 2020.

From Bitcoin to Gold?

In addition, this unloading of bitcoin positions coincides with an influx into funds traded on the gold exchange, the bank notes.

“This suggests that institutional investors seem to be moving away from bitcoin to traditional gold, reversing the trend of the previous two quarters,” analysts say JPM.

The reasons for this change are not clear, they say, but they speculate it could be concerns about the end of Bitcoin’s uptrend and the stability of gold, which looks more attractive. It could also be that the price of bitcoin is simply too high compared to the price of gold, which will stimulate a move away from crypto in favor of the precious metal.

JP Morgan Values ​​Bitcoin At $ 35,000

Thus, JPMorgan’s estimate of the “fair value” of bitcoin has been updated:

“Our bitcoin fair value model is overvalued. Our current fair value for bitcoin, based on a bitcoin to gold volatility ratio of around x4, would be 1/4 of $ 140k or $ 35k. $ 140,000 is the price of bitcoin if its capitalization was equal to private sector gold holdings for investment purposes (about $ 2.7 billion currently). This $ 140,000 price should be seen as a theoretical long-term target in the hypothesis of converging bitcoin volatility with gold volatility and aligning bitcoin distribution with gold distribution in investor portfolios. It goes without saying that such convergence or leveling of volatility or distribution is unlikely in the near future. “

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