Maintaining high volatility is limiting institutional adoption of bitcoin, JPMorgan noted. This is how analysts justified the decrease in the fair valuation of the first cryptocurrency from $150,000 to $38,000. business insider.
The specialists noted that the current 50% pullback from the all-time high in November underlined the nature of the boom-bust cycle, which is an obstacle for institutions to add it to the portfolio.
“Our previous forecast that the bitcoin-to-gold volatility ratio will drop to about a factor of two by the end of 2022 seems unrealistic. We lower the fair value of the first cryptocurrency based on this proportion to 1/4 of $150,000, or $38,000.”, the report says.
The JPMorgan model assumed the convergence of the volatility of bitcoin with the volatility of gold and the alignment of their share in investor portfolios.
The latest wave of sales of the first cryptocurrency cast doubt on its diversification properties, as it went in tandem with the decline in the stock market, analysts added.
JPMorgan did not rule out a further decline in bitcoin quotes amid no signs of capitulation of buyers.
“Open interest in futures and stock balances indicate less panic or liquidation than last May, especially in relation to large crypto investors”, experts concluded.
Recall that the correlation between digital gold and shares of companies in the US technology sector has updated an all-time high, according to Bloomberg.
In January, the IMF warned of the risks of “contamination” of the stock and bitcoin markets.
Earlier, experts from MSCI reported on the growing influence of cryptocurrencies on the dynamics of securities portfolios.
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Maintaining high volatility is limiting institutional adoption of bitcoin, JPMorgan noted. This is how analysts justified the decrease in the fair valuation of the first cryptocurrency from $150,000 to $38,000. business insider.
The specialists noted that the current 50% pullback from the all-time high in November underlined the nature of the boom-bust cycle, which is an obstacle for institutions to add it to the portfolio.
“Our previous forecast that the bitcoin-to-gold volatility ratio will drop to about a factor of two by the end of 2022 seems unrealistic. We lower the fair value of the first cryptocurrency based on this proportion to 1/4 of $150,000, or $38,000.”, the report says.
The JPMorgan model assumed the convergence of the volatility of bitcoin with the volatility of gold and the alignment of their share in investor portfolios.
The latest wave of sales of the first cryptocurrency cast doubt on its diversification properties, as it went in tandem with the decline in the stock market, analysts added.
JPMorgan did not rule out a further decline in bitcoin quotes amid no signs of capitulation of buyers.
“Open interest in futures and stock balances indicate less panic or liquidation than last May, especially in relation to large crypto investors”, experts concluded.
Recall that the correlation between digital gold and shares of companies in the US technology sector has updated an all-time high, according to Bloomberg.
In January, the IMF warned of the risks of “contamination” of the stock and bitcoin markets.
Earlier, experts from MSCI reported on the growing influence of cryptocurrencies on the dynamics of securities portfolios.
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