Experts Advise Crypto Caution As Price Exceeds Fair Market Value

SourceNewsweek
SectorFinancial Markets
CountryMiddle east

Analysts at JP Morgan Chase said Bitcoin's current price exceeds their estimates of fair value and its volatility makes it a poor hedge against inflation."Crypto assets continue to rank as the poorest hedge for major drawdowns in equities," JP Morgan said in a research report, "with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed."James Dimon, CEO of JPMorgan Chase & Co. World Economic Forum / Wikimedia Commons The analysts said greater adoption of Bitcoin will make it track more closely to other cyclical assets, reducing its utility as a way to diversify holdings.Cyclical stocks represent companies providing discretionary items or services such as leisure travel, furniture or expensive clothing that are in demand when the economy is strong and consumers are spending, but are routinely cut back when things turn sour.Typically, cyclical stocks rise during good times and fall during bad.The analysts called Bitcoin an "economic side...read more...