Despite the overall bearish sentiment in the crypto markets, strategists at the American multinational investment bank JPMorgan believe that there is immense upside potential. According to the bank strategists, Bitcoin is undervalued and is on the cusp of seeing a double-digit percentage upswing.
In an investment note authored by the bank’s investment strategists, JPMorgan expressed that Bitcoin could see a price surge from here, stating that from their perspective, $38,000 is a fair price for the leading crypto asset. Moreover, the note also revealed that the bank had now replaced real estate with digital assets in their alternative asset portfolio.
“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,” wrote JPMorgan strategists in the note released on Wednesday.
Global inflation concerns, worsened by the conflict in Europe and rising interest rates, have put pressure on equity and crypto markets as investors become increasingly risk-averse. In the past six months, the crypto markets have struggled after several leading digital assets formed new highs in November.
Notably, the crypto markets have been worse hit by these macroeconomic factors than equity and bond markets. As a result, several crypto assets have dropped over 50% from their highs, even as the total market cap lost about $1.7 trillion. However, JPMorgan believes that this means that there is more room for upside in the nascent market than in other markets like real estate.
Furthermore, addressing the recent Terra ecosystem collapse that rocked the entire crypto market, the investment bank revealed that the crash had done nothing to deter venture capitalists from pouring money into the nascent market. Meanwhile, it is also worth noting that the investment bank, while seeing upward potential in the crypto market, has had to adjust its position on alternative assets as a whole, now ranking them as “underweight.”
Notably, the investment bank is not the only one that sees an upward potential for the developing markets in the short term. Speaking with CoinDesk TV, Grayscale CEO Michael Sonnenshein also expressed a similar sentiment. Sonnenshein said, “I think in the near term, we [crypto] will find our footing.”
Bitcoin once again today fell below the $30k price point as major altcoins Ether, Solana, AVAX, BNB, Polkadot, and ADA saw price drops of over 8%. Consequently, Bitcoin looks set to extend its consecutive weekly losing streak. It is currently down 5.57% on the day, trading around the $29,996 price level.