JP Morgan claims $2400 is "fair value" for Bitcoin (BTC), miners disagree

22 Feb, 2019
by David Robb
Opinion
JP Morgan claims $2400 is fair value for Bitcoin (BTC), miners disagree

A report published recently by JP Morgan has claimed $2,400 as a fair price for Bitcoin (BTC). South China Morning Post reports that many miners are disputing this estimate.

Read more: JP Morgan says Bitcoin might sink below $1,260JPMorgan: "we are big believers in Ethereum"

In the report, entitled Blockchain and Cryptocurrencies 2019: Adoption, Performance and Challenges, JP Morgan analysts treated BTC like a regular commodity and worked out the fair value of Bitcoin based on miner costs. 

According to Ben Gagnon, the co-founder of BTC mining equipment manufacturer LuTech, there "could be no average cost, or break even point, for the entire market, because the way the bitcoin blockchain functions means that there will always be miners seeking to create blocks and get bitcoin rewards so long as they can operate with power-efficient hardware at low electricity cost".

As well as the questioning the methodology behind calculating an average production cost for Bitcoin, it's also worth pointing out that the source isn't entirely unbiased. JP Morgan and its CEO Jamie Dimon have repeatedly dismissed crypto as being "a fraud" and having no value, although the company did surprise many recently by launching its own 'cryptocurrency', the stablecoin JPM Coin.

Read more: What does JPM Coin mean for Ripple and the wider crypto industry?; What happens to Bitcoin if the stock market crashes?

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