Recently, experts have calculated the real value of Bitcoin. The current price of the number one cryptocurrency is said to be 12% higher than its fair value. The estimates are made based on Bitcoin’s volatility in comparison with gold. Strategists at JPMorgan Chase & Co. found out that BTC is roughly four times more volatile than gold. Therefore, its fair price should be around $38,000. If its volatility narrows to three times, the fair value will rise to $50,000. High volatility has always been a problem for Bitcoin. “The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” the strategists wrote. A long-term target for Bitcoin is to reach the level where its total market value is equal to the value of all gold held privately for investment purposes. The analysts at JPMorgan Chase & Co. also said that “January’s price correction looks less like a capitulation than the one last May, which saw Bitcoin tumble as much as 50%.” However, some data indicates a “more long-standing and thus more worrisome position reduction trend” for Bitcoin in the market.
