Recently, while the price of Bitcoin has been climbing, analysts at JPMorgan Chase, a prominent investment bank in the United States, issued another statement of skepticism about Bitcoin, arguing that it’s currently trading at a much higher price than its fair value.

According to Reuters, JPMorgan Chase said in a regular memo to investors that cryptocurrencies such as Bitcoin were an "economic sideshow" and the worst hedge against the decline of stock prices.

Analysts at JPMorgan said the mainstream adoption of Bitcoin had strengthened its correlation with cyclical assets, making it less attractive to diversify a portfolio. "Crypto assets continue to rank as the worst hedge against sharp declines in equity price, with questionable diversification gains at prices well above production costs. Cryptocurrency are increasingly correlated with cyclical assets as cryptocurrency ownership becomes mainstream." the analysts noted.

In January 2021, JPMorgan strategists John Normand and Federico Manicardi argued that Bitcoin was becoming a cyclical asset rather than a hedge against market pressures.

Cyclical assets are stocks that follow a trend that depends on a particular business cycle. For example, companies in non-essential industries such as restaurants, hotels, airlines, furniture companies, and automobile companies. As Cointelegraph previously reported, the question of whether bitcoin is a cyclical or an aperiodic asset remains a matter of debate, with many industry participants strongly arguing that cryptocurrencies are a good hedge against market crises.

The bank's latest comments came shortly after Co-president Daniel Pinto said the bank would eventually have to get into Bitcoin because of a growing customer demand.

Back in October 2020, when Bitcoin was trading at $13,000, JPMorgan predicted that the price would double or triple over the long term. Currently, the price of Bitcoin is over $49300.