How much is bitcoin worth? This is what one of the largest investment banks says
By Sergio García
Date: Monday 28 Jun 2021
(Sharecast News) - It's the million dollar question: How much is bitcoin worth? The cryptocurrencies' leader has lost $1trn in market capitalization from 2.5 trillion in early May, recalls the JP Morgan analyst team led by Nikolaos Panigirtzoglou.
Between $ 23,000 and $ 35,000. That is the price range assigned by the experts of the US investment bank taking into account the volatility associated with the asset, its relation to gold and the new headwinds it faces.
"The mere rise in volatility, especially in what relates to gold, is an impediment to its institutional adoption that reduces the attractiveness of 'digital gold' compared to traditional gold in the portfolios of these institutions," argues Panigirtzoglou and his colleagues.
Precisely the bitcoin / gold volatility ratio is the metric that JP Morgan has used to calculate the value of the cryptocurrency in the coming months.
And the relationship between bitcoin and the stock market? Irrelevant Investor analyst Michael Batnick says that it is no coincidence that people sold everything at the same time in 2020 (from stocks to bonds to gold and crypto) but now do not dare to bet on the asset. This is because the crash of bitcoin can lead to income variable that, in cases such as the United States, is listed in the area of historical highs.
"Sometimes when people talk about uncorrelated assets, what they really mean is negatively correlated assets," he suggests on his financial blog. "That strategy is hard to find because with uncorrelated assets, you have to compare the bad with the good," he adds. "Sometimes bitcoin moves with the stock market, and sometimes it doesn't," he concludes.
WHAT IF IT'S NOT WORTH ANYTHING?
That is the theory defended by Nassim Taleb, author of 'Black Swan' and one of the men who predicted the 2008 global financial crisis, who claims that the leader of crypto is worth nothing and there is no evidence to support the usefulness of blockchain .
'Bitcoin, currencies and bubbles' is the title of Taleb's analysis in which he defends four arguments to destroy the value of the cryptocurrency.
To begin with, Taleb claims that bitcoin is not a concept that fits the idea of a currency without a government and, in fact, denies that it is even a currency. "This failure has been masked by the inflation of the value of the currency," he explains.
In addition, Taleb adds that bitcoin is not a store of value in the short or long term, unlike gold, a precious metal (and historical safe haven) with which crypto is often compared lately. On the other hand, this expert affirms that the currency is not a reliable hedge against inflation, another of the arguments that has recently been proclaimed.
Finally, Taleb concludes his analysis by pointing out that, as if that were not enough, bitcoin is not a safe haven at all, either to protect itself against a dictatorial government or to do so against some natural catastrophe.
Translated by Caoimhe Toman
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN