Jpmorgan on Wednesday reaffirmed bitcoin's fair value at $38,000, which is about 28% above current levels, suggesting the price could rebound sharply after the recent selloff.
Jpmorgan also said cryptocurrencies have overtaken real estate as one of its preferred "alternative assets," or assets that don't fall into typical categories like stocks and bonds.
The bank said it still believed $38,000 was a fair price for bitcoin. That's about 28% higher than bitcoin's current price of about $29,700.
"Compared to January/February last year, the cryptocurrency market pullback in the past month is more like capitulation," jpmorgan strategists including Nikolaos Panigirtzoglou wrote in a note. "Looking ahead, we expect a broader uptrend in bitcoin and cryptocurrency markets."
Cryptocurrencies plunged in 2022 as investors dumped assets seen as risky amid rising inflation and interest rates, war in Ukraine and a slowing global economy.
Bitcoin is down about 37% this year, while Ethereum is down about 48%. The combined market capitalization of all cryptocurrencies has plummeted from about $3 trillion in November to $1.3 trillion in May.
But the sell-off has hurt cryptocurrencies more than other alternative investments such as private equity, private debt and real estate, jpmorgan said. That suggests cryptocurrencies have more room to rally, the bank's strategists said in a note.
"As a result, we have replaced real estate with digital assets and hedge funds as our preferred alternative asset class," they wrote.