Bitcoin Has Soared Above Intrinsic Value – JPM Strategists
United States banking giant JPMorgan Chase’ Strategists have argued that bitcoin (BTC)’s recent rally has ostensibly soared past what they calculate to be its intrinsic value.
The strategists who reportedly include JPMorgan global market strategist Nikolaos Panigirtzoglou judged that the top coin has recently been trading in a way that mirrors its late 2017 rally, which preceded a protracted price slump.
In a bid to ascertain the coin’s intrinsic value, the strategists reportedly analyzed bitcoin as a commodity and calculated its cost of production based on parameters such as estimated computational power, electricity costs and hardware energy efficiency. According to Bloomberg they stated:
“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”
Bitcoin has traded as high as almost $8,300 within the last week having traded sideways below $5,000 throughout February and March.
JPMorgan’s strategist are cited as having said in an apparent qualification of their analysis,
“Defining an intrinsic or fair value for any cryptocurrency is clearly challenging. Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.”