A research team at JPMorgan (JPM) led by analyst Nikolaos Panigirtzoglou believes Bitcoin (BTC) is overpriced relative to its intrinsic value.

According to the report, which was detailed in a recent article by Bloomberg, Bitcoin’s intrinsic value currently sits in the low $5,000 range. This value was calculated by looking at the marginal cost of production including computational power employed and the cost of electricity.

“The market price has declined by nearly 40% from its peak while the intrinsic value has risen by around 10%,” Panigirtzoglou wrote. Adding, “the gap has not yet fully closed, suggesting some downside risk remains.”

In the same report, the analysts highlighted the potential significance of today’s CME Bitcoin contracts launch, which brings the CME Group in direct competition with Bakkt. The leadup to the launch of the new contracts saw a notable boost in CME Bitcoin futures activity, noted JPMorgan.

“This unusually strong activity over the past few days likely reflects the high anticipation among market participants of the option contract,” added Panigirtzoglou.

Time will tell whether the added institutional access to Bitcoin options will bring BTC closer to its intrinsic value.

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.