JPMorgan Chase & Co projects Bitcoin to hit a record $146,000 in the long term as it competes with gold as an asset class, reports Yahoo! finance. The outlook depends on the volatility of the digital currency converging with that of gold to lure more institutional investors, a process that will take time.
- Analysts note Bitcoin’s market capitalization of around $575 billion would have to rise by 4.6 times for a theoretical price of $146,000 to match the total private sector investment in gold via exchange-traded funds or bars and coins.
- “A crowding out of gold as an ‘alternative’ currency implies big upside for Bitcoin over the long term”- JP Morgan.
- JP Morgan does not expect the convergence in volatilities of Bitcoin and gold to happen quickly and could be a multi-year process.
- More institutions and investors are allocating funds into Bitcoin or are open to doing so that could see a digital currency surge.
- Some investors are cautious of the Bitcoin surge, with some linking the recent rally with an unsustainable bubble caused by retail investors and trend-following quant funds.
- JP Morgan sees headwinds in Bitcoin with the building up of speculative long positions and increases in investment wallets holding small amounts of the digital currency.
Bitcoin is currently gaining. BTCUSD is up 0.23%
