JPMorgan Tries Fear-Mongering in Attempt to Sabotage Rowdy Bitcoin Price Rally
By CCN: JPMorgan doesn’t love bitcoin. The bank – the United States’ biggest financial institution by assets – has been historically pessimistic about the flagship cryptocurrency, so just when bitcoin prices started going through the roof, it decided to crash the party with a dire warning.
#Bitcoin prices diverge from intrinsic value, carrying echoes of late 2017, JPM says. pic.twitter.com/DImDoSMv8L
— Holger Zschaepitz (@Schuldensuehner) May 17, 2019
JPMorgan makes yet another effort to sabotage bitcoin
The crypto winter gave JPMorgan’s bitcoin bears reason to cheer earlier this year. The Wall Street firm’s analysts were bandying about a $1,260 bitcoin price target in January, warning HOLDers that they should prepare for more pain in case the crypto winter continued.
Bitcoin’s impressive price rally has made those analysts eat their words as the digital currency is now trading over $7,900. But JPMorgan says that the current bitcoin price is reminiscent of 2017’s boom-bust pattern when the cryptocurrency’s market price had surged ahead of its intrinsic value and then crashed spectacularly.
JPMorgan strategists wrote in a note (via Bloomberg):
Over the past few days, the actual price has moved sharply over marginal cost. The 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.
The note tells us that JPMorgan is trying to rain in on bitcoin’s parade, giving bears fodder by telling them that bitcoin’s current price doesn’t reflect its true value. But there’s a flaw in the JPMorgan has arrived at the “intrinsic value” of bitcoin.
