Bitcoin’s almost uninterrupted escalation to new records has caught the attention of Wall Street like few other titles in recent memory.
The world’s number 1 digital asset was recently traded for about $ 32,000 in Tuesday’s stock, in the last check, but the JPMorgan Chase JPM team,
argue that the blockchain-backed cryptocurrency could be valued at $ 146,000 in the not-too-distant future if it continues to attract demand from gold buyers, as the bank’s researchers think it is already happening.
Analysts point to exits from exchange-traded funds pegged to gold, or ETFs, and inflows to grayscale-sponsored digital currency funds, for example, as part of the evidence that points to increased use of bitcoin as a similar security to gold, which would help to raise its price further into the stratosphere.
“The Bitcoin competition with gold has already started in our mind, as evidenced by the more than $ 3 [billion] of grayscale Bitcoin Trust entries and the more than $ 7 billion Gold ETF exits since mid-October ”(see attached chart):
via JPMorgan
JPMorgan says that, by one measure, bitcoin currently consumes 3.4 times more venture capital than gold and more than 5 times more, if you compare the grayscale Bitcoin Trust to GBTC,
the SPDR Gold Shares GLD,
the largest gold ETF per asset.
Bitcoin BTCUSD,
would have to increase 4.6 times from its current market capitalization of around $ 575 billion – outstanding coins multiplied by the price per unit – to imply a bitcoin price of $ 146,000 “to match the total private sector investment in gold via ETFs or bars and coins, ”wrote JPMorgan’s strategy team, including Nikolaos Panigirtzoglou, Mika Inkinen and Nishant Poddar.
The researchers also said they expect interest in bitcoin to come largely from younger investors.
Read: Opinion: Bitcoin is heading towards a supply shortage – and this will continue to pressure prices
“There is no doubt that this competition with gold as an ‘alternative’ currency will continue in the coming years, as the millennium generation will over time become a more important component of the universe of investors and given its preference for ‘digital gold’ ‘in relation to traditional gold, ”The research team wrote in the research reported on Monday.
The biggest obstacle to the bitcoin price hike and which is likely to make its price movements fragile is volatility.
“But this long-term positive side based on the equalization of bitcoin’s market capitalization with that of gold for investment purposes is conditioned by the volatility of bitcoin converging to that of gold in the long run,” wrote the researchers.
Investors were attracted by the narrative that bitcoin could act as a wealth deposit amid the central bank’s unbridled impression of money last year to drive an economic recovery from the coronavirus pandemic.
PayPal PYPL,
recently allowed users on its platform to buy bitcoin, as well as other sister cryptocurrencies like Ethereum’s Ether coins,
Bitcoin Cash BCHUSD,
and Litecoin LTCUSD,
Square’s SQ,
The popular Cash App also allows users to buy and sell bitcoins.
Bitcoins saw a notable increase in 2020 compared to other assets. Bitcoins have already risen 12% so far in 2021, compared to a 3% gain for the price of GC00 gold,
GOLD,
based on the most active gold futures contract for January. Meanwhile, the Dow Jones Industrial Average DJIA,
the S&P 500 SPX index,
and Nasdaq Composite COMP,
they are all lower at this time of year.