Bitcoin’s Fair Value Might be 12% Less than Current Price

JP Morgan Chase and Co. estimates “fair value” for Bitcoin around 12% less than the current price, according to  strategists led by Nikolaos Panigirtzoglou. Their model is based on the volatility in comparison to gold.

The strategist’s model reflected a  fair-value level at around $38,000 based on Bitcoin being roughly four times as volatile as gold, according to a note published on Tuesday. In a scenario where the volatility differential narrows to three times, the fair value rises to $50,000, they estimated. Bitcoin was trading at around $43,400 as of 11:20 a.m. in Hong Kong.

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