JPMorgan Gave Up Real Estate for Crypto; Say Bitcoin Trades at a 30% Discount

According to a group of strategists at JPMorgan Chase & Co, an American investment bank, cryptocurrency assets — and hedge funds — have replaced real estate as the preferred asset category. In an investment report, strategists led by Nikolaos panigirtzoglou also said that the transaction discount of Bitcoin (BTC) was as high as 30%.

“Although the public market has priced the risk of a major recession, and digital assets have been significantly repriced after the collapse of the Latin America (UST), some alternative assets, such as private equity, private debt and real estate, seem to be lagging behind,” it said.”Therefore, we replaced real estate with digital assets as our preferred alternative asset category.”

However, the bank’s strategists lowered alternative investments – those types of assets other than stocks, bonds or cash – from “overweight” to “underweight” on the grounds of continuing macroeconomic difficulties. JPMorgan Chase & Co estimates that the return on alternative assets such as cryptocurrencies will be 10% in the coming year. By comparison, the return on traditional assets is 12%.

JPMorgan Said Bitcoin was Undervalued by 30 percent

Although the market is still uneasy about the recent sell-off, panigirtzoglou and his team believe that Bitcoin will rebound soon. Strategists insist that according to the volatility of Bitcoin and gold, the reasonable value of Bitcoin is $38000. This means that at the current price of about $29600, the transaction price of BTC has a discount of nearly 30%.

They said. “Compared with January / February last year, the adjustment of the cryptocurrency market in the past month looks more like a surrender. In the future, we will see more room for the rise of Bitcoin and cryptocurrency markets.”

JPMorgan’s strategists are optimistic about the future of the cryptocurrency industry, as long as venture capital funds continue to flow in. They said, “the trajectory of venture capital funds is crucial to help the cryptocurrency market avoid the long winter of 2018/2019.”For their views, venture capital firm Andreessen Horowitz announced that it would inject $4.5 billion into cryptocurrency startups to take advantage of the market downturn.

JPMorgan CEO Criticizes Cryptocurrency

JPMorgan Chase & Co has begun to provide cryptocurrency services to its customers despite the harsh criticism of CEO Jamie Dimon Bitcoin. In 2017, Dimon attacked Bitcoin, calling it “fraud”. Last October, he redoubled his criticism and said that digital assets were “worthless”. But he decided to let his clients make their own decisions because they were “adults”.

“So if they want to have the opportunity to buy Bitcoin, we can’t monitor it, but we can give them legal and clean opportunities as possible,” Dimon said at the time.