Bitcoin’s recent slide has left the digital token well below its fair price, giving the cryptocurrency “significant upside” now, JPMorgan Chase said in a research note this week.
The bank said bitcoin was undervalued by 28%, and put its price target for the coin, which was trading at just above $29,600 on Thursday afternoon, at $38,000 according to Markets Insider. Bitcoin fell below $26,000 earlier this month for the first time since December 2020, just as stock markets have been similarly pummeled — largely due to inflation fears.
“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,” strategist Nikolaos Panigirtzoglou wrote on Wednesday.
JPMorgan’s positive outlookis notable because CEO Jamie Dimon is a longtime cryptocurrency skeptic. Dimon has said that he “personally think[s] that bitcoin is worthless,” though he has acknowledged that many of his clients feel differently.
“I’m not a bitcoin supporter. I don’t care about bitcoin. I have no interest in it,” he said last year. “On the other hand, clients are interested, and I don’t tell clients what to do.”
Last summer, JPMorgan began giving wealth management clients access to a six crypto funds, to add bitcoin exposure to their portfolios. That’s despite Dimon’s prior comments that bitcoin has “no intrinsic value” and that “regulators are going to regulate the hell out of it.”
On Wednesday, Securities and Exchange Commissioner Hester Peirce told CNBC that the U.S. has “dropped the regulatory ball” with respect to crypto. She called on Congress to clarify the SEC’s regulatory role, so her agency can take more proactive steps against crypto fraud going forward.
“We’re not allowing innovation to develop and experimentation to happen in a healthy way, and there are long-term consequences of that failure,” Pierce said.