JPMorgan says bitcoin fairly priced at $38K — 14 percent below current level

Bitcoin is still overpriced, even after a recent selloff that sparked fears of a “crypto winter,” according to a new analysis by JPMorgan Chase strategists.

The leading cryptocurrency has a “fair value” of approximately $38,000 per coin – a price point analysts reached after comparing bitcoin’s volatility to that of gold, according to a note to clients published Tuesday. The JPMorgan Chase strategists determined bitcoin is approximately four times as volatility as the precious metal.

Bitcoin was trading at $44,149 as of mid-morning on Wednesday according to data from Coinbase. JPMorgan’s fair value price is roughly 14% cheaper.

“The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” the strategists wrote in the note, according to Bloomberg.

The analysts said the fair market value for bitcoin would rise as its pricing volatility declines and the digital currency is more widely adopted. For example, if bitcoin’s volatility was three times that of gold rather than four, a fair price would be $50,000.

JPMorgan still expects bitcoin to become more valuable over time, with a long-term theoretical target set at $150,000.

That target would be well received by crypto investors who have weathered losses in recent months. Bitcoin’s price has plunged from its peak of $69,000 in November, falling below $38,000 last month before a slight rebound in recent days.

Analysts have attributed the crypto downturn to various factors, including fears of increased regulation in key international markets, geopolitical tensions in various regions and concerns about the Federal Reserve’s plan to tighten monetary policy.

Last month, Goldman Sachs analysts suggested bitcoin could hit $100,000 within a few years if more investors adopt the digital currency as a so-called “store of value,” or an asset maintains its value with minimal depreciation over time.