JPMorgan Says Bitcoin's Intrinsic Value Remains Below Market

"The gap has not yet fully closed, suggesting some downside risk remains," said JPMorgan strategists led by Nikolaos Panigirtzoglou (MD for Global Market Strategy) in a note published on Friday, as reported by Bloomberg.

According to the report, the intrinsic value of bitcoin is estimated by the giants of investment banking by treating the Bitcoin as a commodity and taking the marginal cost of production. The computational powers and the electricity cost are factors which are noted too. Bloomberg Intelligence reported recently that they expect a hike in the price of bitcoin this year. A senior commodity strategist, Mike McGlone had recently said that bitcoin is leading the adoption race in 2020 and the other cryptocurrencies are playing catch up. He noted that the fixed supply of twenty-one million coins and the adoption rate is set to increase more, which would benefit Bitcoin in the long run.

JPMorgan Optimism Regarding CME

JPMorgan is boldly optimistic and views "high anticipation "of the launch of CME bitcoin options among people participating in the market. The possibilities are set to go live today. "It was only a matter of time before options started to account for a big part of crypto," Rich Rosenblum, co-founder of crypto trading firm GSR, told the block last week. However, the introduction of new Bitcoin contracts has its pros and cons. At times it is a benefiting factor for bitcoin, but some times it can drag the price downwards too. ICE debuting its new futures contract in September, for instance, pulled the price down. When CME and Cboe Global Markets Inc. launched futures on the world's biggest cryptocurrency, the rate peaked to a staggering amount of $19,000.