JP Morgan Analyst Nikolaos Panigirtzoglou: The intrinsic value of Bitcoin calculated from mining costs

By AymT 01/13/20 10:45 AM

JP Morgan analyst Nikolaos Panigirtzoglou presented Bloomberg an analysis of the intrinsic price of bitcoin calculated from mining costs. Bitcoin value reportedly supported by mining costs is reported in a comparison chart.

Nikolaos Panigirtzoglou JPMorgan analyst | Image via Yahoo Finance

According to the data released by JP Morgan, its intrinsic value is calculated from the computational resources and electric power invested in bitcoin mining, and since the BTC price is still exceeding the intrinsic value, it is down at risk, Panigirtzoglou analyzes.

Bitcoin market price and intrinsic value (black line is market price, blue line is intrinsic value) Source: JPMorgan

According to the chart, the divergence has been seen since the bubble period in 2017. Throughout the year, prices will continue to change in line with the intrinsic value calculated from mining costs throughout the year.

In addition, the comparison chart shows that bitcoin prices, which have soared since April 2019, are still trading above their intrinsic value.

He noted that the launch of CME’s Bitcoin options deal, scheduled for 13th local time, already reflects the high expectations of market participants.

He added that the 69% increase in CME Bitcoin futures open interest since the end of the year shows expectations for this option, commenting on the following:

Unusual open interest growth over the past few days likely reflects strong market participants’ expectations for options trading (starting on the 13th).

If you look at skew’s published tweet on the cryptocurrency derivatives market, you can see that in recent days, open positions have skyrocketed.

Most active week in three months at the CME ahead of the options launch this Monday – looking strong! pic.twitter.com/k4tjN1BkNc

— skew (@skewdotcom) January 11, 2020