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JPMorgan's crypto, Bitcoin Futures, Valuation of Ethereum
February 18  |  1 min read

Trend Is Your Friend

BeQuant Analytics, a daily cryptocurrency market analysis contributor

Social media remains abuzz about J.P. Morgan’s move to announce the launch of its JPM coin last week. The crypto camp remains rather split, as evidenced by the somewhat inconclusive price action across the cryptocurrency market. One side argues that the JPM coin is a private blockchain, limited to the JPM ecosystem, while the other side claims that it clearly shows a user case for crypto assets. For J.P. Morgan, the move is a confirmation of what their senior management has been saying all along–blockchain makes sense and it therefore made sense for the bank to cherry pick part of the digital assets ecosystem that works for the bank. It doesn’t mean that the same feature selection will work for a retailer looking to create a similar cryptocurrency for its own ecosystem.

Only time will tell but it is worth pointing out that last week saw CBOE Bitcoin Futures expire and this week will see the CME equivalent run its course. As such, the price action may not be the true representation of the underlying sentiment and it is more linked to derivatives and spot market re-aligning.

BTC price, ETH price, cryptocurrency price list

Still, as it stands, BTC managed to eke out gains to advance above $3,700 level, while ETH is on path to test $150 level.

A few articles surfaced highlighting a negative correlation between the fundamental metrics and the underlying valuation of ETH. The metrics in question range from -0.01 to -0.09 and as such, calling this correlation as negative is misguided. In fact, it shows that the crypto asset is incredibly speculative and the valuation methodology that is applied to traditional asset does not yield similar results for digital assets. As alluded to in the past, it may be prudent to build in an assumption related to the potential usage of said currency or a token when seeking to find the future or the current fair value.

Thank you for reading,

The BeQuant Analytics team