JPMorgan sees an upside for BTC and the cryptocurrency market.
On May 25, an American multinational investment bank and financial services holding company, JPMorgan stated that Bitcoin’s (BTC) fair price is higher by 28% than its current level of roughly $29,500 and now sits at $38,000.
In 2022, cryptocurrencies fell significantly and caused investors to abandon riskier assets due to growing inflation and interest rates, Russia’s aggression against Ukraine, and a recession in China.
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The bank also noted that cryptocurrencies have “overtaken real estate as one of its preferred ‘alternative assets’ — assets that don't fall into typical categories, such as stocks and bonds” and continued:
Thus far, there is little evidence of VC [venture capital] funding drying up post-Terra’s collapse. Of the $25 billion VC funding year-to-date, almost $4 billion came after Terra. Our best guess is the VC funding will continue and a long winter similar to 2018/2019 would be averted.
Managing Director at JP Morgan Nikolaos Panigirtzoglou additionally stated:
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.
Bitcoin (BTC) is down roughly 37% so far this year, while Ethereum (ETH) dropped about 48%. The overall market capitalization of all cryptocurrencies has fallen from around $3 trillion in November to $1.3 trillion in May.
On the other hand, JPMorgan implied that the selloff had a greater impact on crypto than other investment alternatives, including real estate, private credit, and private equity (PE). This means that there are far more opportunities for cryptocurrencies to rise from the ashes.
In other news, VC firm Andreessen Horowitz (a16z) recently stated that it successfully closed its fourth crypto fund estimated at $4.5B to aid Web3 startups at every stage.