JP Morgan analysts take a shot at Bitcoin

Banking giant, JP Morgan Chase & Co. took a dig at Bitcoin, suggesting that the cryptocurrency’s latest rally has pushed its price beyond its intrinsic value.

JP Morgan analysts wrote in a note obtained by Bloomberg that, 

“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.”

The JP Morgan team treated Bitcoin as a commodity, calculating its “cost of production” based on a number of factors, including estimated computational power, electricity expenses, and hardware energy efficiency.

The analysts concluded by adding,

“Defining an intrinsic or fair value for any cryptocurrency is clearly challenging. Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.”

JP Morgan has made the news quite a few times after thrashing Bitcoin and other cryptocurrencies. CEO, Jamie Dimon called the currency- a “fraud” and suggested that he simply doesn’t care about Bitcoin. Even though JP Morgan has its own blockchain based digital currency, it is neither a cryptocurrency nor a stablecoin.