Analysts at American investment bank JPMorgan Chase have delivered another skeptical statement on Bitcoin 

BTC

$23,137

, arguing that its current price is much higher than its fair value.

In a regular memo for investors, JPMorgan argued that cryptocurrencies like Bitcoin are an “economic side show” and the poorest hedge against a decline in equity prices, Reuters reports Friday.

The analysts said that the mainstream adoption of Bitcoin increases its correlation with cyclical assets, which makes it a less attractive asset for portfolio diversification:

“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed.”

In January 2021, JPMorgan strategists John Normand and Federico Manicardi argued that Bitcoin has been becoming a cyclical asset, opposed to a hedge against market stress.

A cyclical asset refers to stocks that follow a trend depending on a certain business cycle. For example, companies in discretionary industries like restaurants, hospitality, airlines, furniture, automotive and others. As previously reported by Cointelegraph, the question of whether Bitcoin is a cyclical or non-cyclical asset is still debatable, with many industry players strongly believing that the cryptocurrency is a great hedge against a market crisis.

The latest comments from JPMorgan come shortly after the company’s co-president Daniel Pinto said that the bank would eventually have to get involved in Bitcoin following growing client demand. In October 2020, when Bitcoin was trading around $13,000, JPMorgan predicted that Bitcoin's price would double or triple in the long term.

At the time of writing, Bitcoin is trading at $52,764, up more than 70% over the past 30 days. After breaking the $50,000 price level on Feb. 16, Bitcoin briefly hit a new all-time high of above $53,000 earlier today, according to data from crypto monitoring website CoinGecko.