Analysts at the leading US investment bank, JPMorgan, have concluded that real estate is no longer a good alternative investment. Instead, digital assets and hedge funds are now the better alternatives. In the report sent to investors, JPMorgan’s lead strategist, Nikolaos Panigirtzouglou, further said that BTC’s current value is still 30% off its actual value.
JPMorgan’s View About The Crypto Market
The report reads, “it is a fact that recession risks exist in prices of any public market. Also, the huge price correction in the crypto market currently is one of the consequences of the collapse of the Terra network. However, some alternative assets like private debt, real estate, and private equity are lagging.”
“For this reason, we are removing real estate from our favorite alternative asset class and replacing it with digital assets.” Yet, the bank’s analyst still lowered the rating of these alternative investments. It changed its rating from overweight to underweight. The bank categorizes any investment outside of cash, bonds, and stocks as alternative investments. Hence, crypto and real estate fall into this category.
However, the bank clarified that the global macroeconomic issues are their reason for this change in rating. JPMorgan predicts that the ROI from investing in these alternative assets (including digital assets) should rise by 10% within the next 12 months. That represents some decent returns since the bank expects an ROI of up to 12% from traditional assets.
BTC’s Current Price Is 30% Off Its Actual Value – JPMorgan Analysts
Even though the crypto market is still experiencing intense selling pressure, JPMorgan analysts believe a BTC rally will soon happen. Using the BTC- Gold volatility ratio, Panigirtzouglou and his team forecast that the $38K level is BTC’s ‘fair value.’
However, the current Coinmarketcap data shows that BTC currently trades at $29,389. Hence, they conclude that BTC is 30% off its fair price. “The crypto market condition in the last 30 days seems like a collapse in comparison to the conditions at the beginning of the year.”
“Nonetheless, we remain positive about a BTC rally and wider crypto market.” However, the analysts remarked that institutional investors would be crucial to the bullishness of the leading digital asset.
The report added, “the path chosen by VCs will be crucial in helping the digital asset market in the long bear season of 2018 and 2019.” The VCs are also positive about a reversal of the current downtrend in the crypto market. For instance, a recent official statement from a16z states that it would support some crypto startups with $4.5B funding. The investment firm said the funds will help them soften the effect of the current bear market.
JPMorgan Makes A U-Turn On Crypto
Interestingly, JPMorgan now offers crypto services even though its CEO was once a harsh critic of the leading digital asset. Even last October, JPMorgan CEO Jamie Dimon maintained his anti-crypto stance, calling it a fraud.. Dimon said cryptos are worthless. Then, he added the bank’s customers would determine whether JPMorgan would eventually start offering crypto services.