JPMorgan Chase & Co has derived after a series of calculation and the study of statistics that Bitcoin has been trading above its intrinsic values. It has been rallying almost in the same way as it did two years back. The calculations were made after treating Bitcoin as a commodity and then finding the cost of one bitcoin production.
The most important reason for this statistics was because of the journey of bitcoin from down to $8000 then down again and now the cryptocurrency is back again at $8000. This is the major reason why the largest bank of the world JPMorgan is convinced that Bitcoin is now trading above its intrinsic values.
JPMorgan treated Bitcoin as a commodity and then calculated its intrinsic value. The bank estimated the cost of producing one Bitcoin, by taking into consideration the factors such as computational power, electricity expense, and hardware energy efficiency.
According to the strategists at JPMorgan, defining the intrinsic value for a cryptocurrency is a difficult task. There are a number of views regarding bitcoin as some researchers believe that the cryptocurrency doesn’t have any fundamental value while others say the intrinsic value is way above the current price.
The Bitcoin price has been changing constantly over the past few weeks. In comparison with the prices last year this time now the prices are currently up over 100 percent since the start of the year. Bitcoin went down below the $4,000 mark towards the end of last year, but it has now attained trade just above $8,000.
JPMorgan Chase & Co. and especially its CEO, Jamie Dimon, have been posing in a place against bitcoin for some time now. In 2017, Dimon called Bitcoin a fraud. Also going way ahead then this he also threatened to fire any of the bank’s employees that were caught dealing with cryptocurrencies.
Although while speaking at the Axios conference in Los Angeles, Dimon said that although his views about Bitcoin haven’t changed, he regrets calling it a fraud. He stated that he hasn’t changed his mind, but instead, doesn’t care about the cryptocurrency.
But recent news reveals that JPMorgan’s stance on digital currencies seems to have changed as the bank has developed its own crypto called the JPM Coin. The digital currency, which is pegged to the US Dollar, is designed to enable the bank to carry out instantaneous transactions using blockchain tech.