(Bloomberg) — Bitcoin faces a “modest headwind” within the brief time period primarily based on an evaluation of bets within the futures market and an estimate of the cryptocurrency’s intrinsic worth, in response to JPMorgan Chase & Co.
A positioning indicator derived from futures reveals that “there nonetheless seems to be an overhang of internet lengthy positions,” strategists together with Nikolaos Panigirtzoglou wrote in a notice Tuesday. A drop in Bitcoin in September eradicated a lot “froth” but it surely stays about 13% increased than an estimate of intrinsic worth, they stated.
Bitcoin slid over eight% final month however held above the $10,000 degree and has since rallied again previous $11,000. Whereas cryptocurrencies have had a unstable 12 months, the Bloomberg Galaxy Crypto Index of digital cash has surged greater than 80%, turning the sector into one among this 12 months’s finest performing asset lessons.
The JPMorgan strategists stated they calculated an intrinsic worth by successfully treating Bitcoin as a commodity and searching on the marginal price of manufacturing. Additionally they stated corporates are rising as a supply of demand, after funds agency Sq. and know-how firm MicroStrategy made vital purchases.
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