[2019-05-20] JPMorgan: Bitcoin Surged Beyond Its Intrinsic Value

[nulltx]

Bitcoin has been unstoppable in recent weeks. The digital currency continued its recovery after a horrid few months, hitting a 2019 high of $8,350. This was after the currency had traded below $4,000 just a month earlier. While many believe that the price is finally catching up to the developments in the field, U.S’ largest bank isn’t as enthusiastic.

According to JPMorgan, bitcoin may have gotten ahead of itself with its recent rally. In a note to investors, some of the bank’s analysts suggested that the currency had surged beyond its intrinsic value. This, they believe, is a similar situation to the 2017 price rise which preceded a devastating slump.

The analysts wrote:

"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."

Read More: https://nulltx.com/jpmorgan-likens-price-rally-to-2017/

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[CryptoBry]

Well, I am hoping that JPMorgan analysts can be wrong this time. Bitcoin is right now at $7,900 seemingly fighting at this level and it can go either both ways. Anyway, what is important for us is that we are now out of the so-called bitcoin winter and it is forward with clear growth. In case, bitcoin will stabilize at around $7,300 that can be a very opportunity for many to catch up and get some bitcoin they deserve. Things are now getting exciting with bitcoin and it shows in the media frenzy which I know can help a lot spread the good news of bitcoin and even the whole cryptocurrency market.

[odolvlobo]

A report by Bloomberg revealed that the analysts treated bitcoin as a commodity in their analysis. They then calculated its cost of production using inputs including hardware energy efficiency, electricity expense, and estimated computational power.

The constant repetition of these old misconceptions is tiring.

The "intrinsic" value of a something is not the cost of producing it.

Furthermore, the price of a bitcoin determines the cost of mining it. It is not the other way around. If the price of a bitcoin goes up, the cost of mining it will go up as more miners start mining. If the price of a bitcoin goes down, the cost of mining will go down as fewer miners continue mining.

[davis196]

It is well known that JPMorgan is anti-bitcoin(most of the time),when they can't get any profit out of crypto.
The "intrinsic value" theory is bullshit.The market price depends solely on supply and demand and it can be way higher than some "intrinsic value"(the sum of all costs involved in mining bitcoin).

[Kakmakr]

JPMorgan likes to come up with new reasons to bash Bitcoin, when the price start to rise. People will invest in dog shit, if they can double their money in one month. They could care less if it has intrinsic value or not, so JPMorgan should rather focus on cleaning up their own reputation with a long history of it's involvement with money laundering and economic crime.

https://www.dailysabah.com/finance/2019/03/26/jpmorgan-record-not-so-clean-with-money-laundering-manipulation

Do not throw stones, if you live in a glass house.  

[magneto]

I don't think that the intrinsic value of bitcoin is necessarily determined by the cost of mining one unit of it, on average, at all.

It's more about the demand side of the equation, as well as how much utility bitcoin is serving to the market. That's how intrinsic value should be defined as, rather than from the supply and miners' point of view.

Besides, these short term value fluctuations are completely expected and have been seen countless times before. It's nothing special. Whilst JPMorgan may be right about the fact that a correction will be coming in the short term, I still think that in the long run the outlook is still bullish. Besides, JPMorgan has demonstrated that they pretty much switch up their stance on BTC completely arbitrarily, thus I would not take them too seriously.

[1Referee]

According to JPMorgan, bitcoin may have gotten ahead of itself with its recent rally. In a note to investors, some of the bank’s analysts suggested that the currency had surged beyond its intrinsic value. This, they believe, is a similar situation to the 2017 price rise which preceded a devastating slump.

In other words, other institutions pumped the price of Bitcoin to levels JPMorgan doesn't feel comfortable averaging in. I like that.

Intrinsic value is in the mind of the beholder, and can be subject to change depending on the condition of the market. An overbought market today is tomorrow's missed opportunity. Get on board or cry yourself to sleep. With how there are plenty of platforms to short Bitcoin, you can actually put your money where your mouth is and short it, or else, gtfo.