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Including the Bitcoin derivatives markets and mining expenses, Bitcoin is currently consuming six times the risk capital of gold and twice the value required for it to reach the market capitalization of $12 trillion organically.

Comparison with gold’s risk capital puts an upper limit of $25,000 on the fair value of Bitcoin, estimated JP Morgan.

The bank noted that an 8% cash balance allocation to Bitcoin “is unlikely to be followed by more mainstream corporates.” They recommend a smaller share of around 1% of an investment portfolio. 

The bank is concerned about retail and futures market euphoria hurting Bitcoin and crypto’s long-term value if it continues its unsustainable path. 

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