Dimon said that the price of the pioneering cryptocurrency could exceed USD 100,000 next year, and only a sharp drop would prevent it. JPMorgan stated that Bitcoin should be worth USD 35,000, 44% below its current price at USD 63,000.
Jamie Dimon, the CEO of US-based investment bank JPMorgan, recently stated that the value of Bitcoin (BTC) should be approximately USD 35,000. The executive said that the highest prices are not appealing despite the possibility of making substantial profits.
Dimon reported that the financial institution believes that the price of the pioneering cryptocurrency could exceed USD 100,000 next year. The main drawback would be that a sharp drop occurred despite the pronounced upward trend.
In October, Dimon insisted that Bitcoin was a useless and worthless asset, which annoyed cryptocurrency users. However, he expressed that he did not believe in Bitcoin, clarifying that adult people are free to buy or sell their holdings.
JPMorgan Believes that Bitcoin Is Overvalued
JPMorgan stated that a reasonable price for Bitcoin would be USD 35,000, which is 44% lower than its current price at USD 63,000. The institution bases its estimate on the volatile nature of cryptocurrencies and their comparison to gold. The value of the crypto asset is four times more unpredictable than that of the precious metal.
The analysts from JPMorgan explained that the halving of relative volatility next year would make a price of USD 73,000 seem reasonable. They said that unpredictability in the value challenges the idea of a value of USD 100,000 or more. That seems to be a sustainable target for Bitcoin as there is not a significant decline due to sharp fluctuations.
Billionaire and PayPal co-founder Peter Thiel agreed that the price of Bitcoin above USD 60,000 could be excessive. The executive argued that its high valuation could be a sign of uncontrolled inflation.
JPMorgan Suggests Investing in Real Estate Instead
JPMorgan strategists consider that real estate, specifically industrial and residential properties, will benefit from the expanding economy. They said that this sector would grow at a pace above the trend.
The financial institution explained that cryptocurrencies could move forward, but the ride could be too bumpy to recommend it as a core item. Although they expect cryptocurrencies to continue to rise for next year, they recommend investors avoid volatile assets and take over real estate.
In other words, JPMorgan considers that the price of real estate will rise due to the improvement of economic growth expectations. In that regard, they stated that investors with enough cash should consider investing in real estate since stocks and bonds will underperform after next year.
The investment bank commented that cryptocurrencies are not attractive at their current prices. However, they have said that investors turn to them as a store of value or a hedge against inflation.
The relevance of Bitcoin in the economic system is increasingly evident, which investment banks and other financial institutions do not disregard. The cryptocurrency has proved o multiple occasions that it can rebound from its worst lows until resuming and exceeding its previous all-time highs.
By Alexander Salazar
