The crypto market has seen roughly $1 trillion in value erased since January, with leading digital assets Bitcoin and Ether selling off 38% and 48% year-to-date, respectively. And the downfall of the stablecoin TerraUSD this month has only added to the bearish sentiment surrounding the industry, leading many to ask whether we are in the midst of a “crypto winter.” 

But crypto investors are getting some much-needed support from an unlikely source this week—JPMorgan Chase.

The investment bank’s strategists, led by Nikolaos Panigirtzoglou, said in a Wednesday note that they believe Bitcoin, the world’s leading digital asset, has “significant upside potential” after its recent fall.

The strategists maintained their $38,000 price target for Bitcoin, which represents a potential 29% jump from the cryptocurrency’s Wednesday morning trading level of $29,430.

“The past month’s crypto market correction looks more like capitulation relative to last January/February, and going forward, we see upside for Bitcoin and crypto markets more generally,” the strategists wrote.

JPMorgan now sees digital assets and hedge funds as its “preferred” alternative asset classes, with real estate being moved to the sidelines as mortgage rates soar.

However, the investment bank’s strategists also downgraded alternative investments as a whole to “underweight” from “overweight,” citing persistent macroeconomic challenges.

The crypto shift at JPMorgan

JPMorgan has made strides to get more involved in the crypto industry since last year, when it gave its wealth management clients access to six crypto funds, including the Grayscale Bitcoin Trust.

The bank also announced in February that it would make a “strategic investment” in TRM Labs, a blockchain analysis firm.

The investment comes despite CEO Jamie Dimon’s long history as a crypto critic. Dimon argued that Bitcoin was a “fraud” in 2017, and called the leading cryptocurrency “worthless” in October of last year.

Still, Dimon noted that his clients are “adults” who can make their own decisions. 

“So if they want to have access to buy Bitcoin, we can’t custody it, but we can give them legitimate, as clean as possible, access,” he said at an Institute of International Finance event in October.

In the months since, Dimon’s tone on cryptocurrencies has remained bearish, but at the Wall Street Journal’s CEO Summit in May, he praised blockchain technology, saying that it has proven itself to be a useful innovation.

On Wednesday, JPMorgan’s strategists also struck a more upbeat tone, arguing that despite the recent crypto sell-off, there has been no evidence that venture capital (VC) funding in the industry is waning.

To their point, also on Wednesday, the VC firm Andreessen Horowitz announced that it had raised $4.5 billion for its fourth crypto fund in hopes of taking advantage of bargains in the crypto bear market.