Investment bank giant JPMorgan has set a long-term bitcoin price target of more than $ 146,000 based on the assumption that the cryptocurrency will grow in popularity as an alternative to gold, reports Bloomberg.
“Eliminating gold as an ‘alternative’ currency implies a big advantage for bitcoin in the long run,” wrote strategists led by Nikolaos Panigirtzoglou in a note on Monday. “Bitcoin’s [current] the market capitalization of around $ 575 billion would have to increase 4.6 times – for a theoretical Bitcoin price of $ 146,000 – to match the total private sector investment in gold through exchange-traded funds or bars and coins. “
However, analysts have argued that bitcoin price volatility needs to fall for institutions to make large allocations. The convergence of bitcoin and gold volatilities is a “multi-year process” and suggests that the goal of more than $ 146,000 is a long-term goal, JPMorgan noted.
Bitcoin rose 300% to $ 29,000 in 2020 and extended earnings to a new record price of $ 34,420 in the first three days of the new year. The cryptocurrency has gained over 160% in just the past three months, helped by increased institutional participation.
While the cryptographic community expects the rally to continue, JPMorgan sees signs of “speculative mania” and believes that greater gains for the $ 50,000- $ 100,000 region may be unsustainable in the short term.