Although JP Morgan may not trade Bitcoin or offer crypto-specific services to its clientele, the company does analyze this nascent market once in a while.
This much was made clear very recently. One individual this week shared a report from JP Morgan, dated May 22nd, that included a post-halving analysis of the Bitcoin mining scene.
Analysts at the multinational financial institution found that through their analysis of Bitcoin’s intrinsic value, BTC is currently trading “25% below what the intrinsic price would be after the halving.” The intrinsic price JP Morgan found was derived through the average cost of mining one BTC.
While the analysts suggested that no concrete signals can be garnered from the fact that the cryptocurrency is below its intrinsic value, analysts think BTC will eventually catch up.
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Bitcoin Will Catch Up to Intrinsic Value, Analysts Think
As it stands according to JP Morgan analysts, Bitcoin’s intrinsic value sits somewhere around $11,500 — over $2,500 higher than the current market price.
While this price may seem miles away, it’s attainable due to fundamental trends.
Blockchain insights firm Santiment shared on May 21st that Bitcoin’s Network Value to Transactions Ratio (NVT) remains “healthy,” suggesting prices may soon resume higher despite the recent drop:
“In spite of BTC’s mild -4.4% downswing today, its NVT looks healthy, and our model is showing a semi-bullish signal. The amount of unique tokens being transacted on Bitcoin network is slightly above average for in May, according to where price levels currently sit,” Santiment wrote.
BlockTower Capital, a cryptocurrency and blockchain investment fund, echoed the optimism. In a note, the firm said that the “macro case” for BTC has “never been more obvious.”
It attributed its optimism to multiple trends, such as growing distrust in central banks, the world’s adoption of digital technologies amid the ongoing illness, and growing geopolitical tensions as economies break down.
Related Reading: Crypto Tidbits: Satoshi Isn’t Dumping His Bitcoin, China ‘Bans’ Cryptocurrency Mining
JP Morgan & Chase Supports Crypto Firms
JP Morgan’s latest report about Bitcoin comes as JPMorgan & Chase — the banking division of the firm — has begun to service “crypto-native” clients for the first time ever.
As reported by the Wall Street Journal ten days ago, the bank has taken on two top Bitcoin exchanges, Coinbase and Gemini Trust, as clients. “People familiar with the matter,” said that the accounts were opened and approved in April, and transactions through the account have just started to be processed.
“The bank is primarily providing cash-management services to the firms and handling dollar-based transactions for the exchanges’ U.S.-based customers, according to the people.”
According to Mike Novogratz — CEO of Galaxy Digital and a former partner at Goldman Sachs — this news is a massive deal, a “big deal” in fact.
The Wall Street investor remarked that the firm’s acceptance of cryptocurrency clients is a sign of “recognition that the future will include crypto currencies, digital assets, and blockchain based systems.”
The JPM announcement that they will provide banking services to Coinbase and Gemini is a big deal. Go $BTC. It is recognition that the future will include crypto currencies, digital assets, and blockchain based systems.
— Michael Novogratz (@novogratz) May 12, 2020
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