JPMorgan said it believes Bitcoin's fair price should be 28% above current levels. The firm stated that cryptocurrencies are now its preferred alternative asset.

JPMorgan said Bitcoin's fair price is 28% higher than its current level, implying a significant upside from that point, according to Business Insider. The bank reported that cryptocurrencies have overtaken real estate as one of the preferred alternative assets. Alternative assets are considered to be those that do not fall under typical categories such as stocks and bonds. It said it sticks to its view that $38,000 is a fair price for Bitcoin, up 28% from Bitcoin's level of around $29,722 on Wednesday morning.

“The past month's crypto market correction looks more like capitulation relative to last January/February and going forward we see upside for bitcoin and crypto markets more generally,” the bank's strategists, including Nikolaos Panigirtzoglou, wrote in the note.

Bitcoin is down about 37% for the year and Ethereum is down about 48%. The total market value of all cryptocurrencies fell from $3 trillion in November to $1.3 trillion in May. JPMorgan said the sell-off hurt cryptocurrencies more than other alternative investments such as private equity, private debt, and real estate. This suggests that crypto has more room to recover, the strategists said in a note.

“Thus, we are replacing real estate with digital assets as our preferred alternative asset class along with hedge funds,” they wrote. But the investment bank said it is now less interested in alternative investments, switching to an “undervalued” rating from “overweight” earlier.

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