JPMorgan analysts predict a future where one BTC could cost $146,000. In a new report, the analysts of the international investment bank explain why the cryptocurrency could be much more valuable than it currently is.
In 2020, Bitcoin rallied by 300% to $29,000, increasing gains as it reached a peak of $34,420 in the first three days of the new year. The cryptocurrency has added over 160% to its value over the last thee months alone. While its phenomenal growth has shaken away doubts of its potential, many continue to worry about its prospects due to its volatility.
“Bitcoin’s [current] market capitalization of around $575 billion would have to rise by 4.6 times – for a theoretical bitcoin price of $146,000 – to match the total private sector investment in gold via exchange-traded funds or bars and coins.”
Analysts argue that the volatility of the apex cryptocurrency will need to reduce in order for institutions to invest more into it. They predict that it could take multiple years for BTC volatility to become more similar to that of gold, an asset which is considered as relatively low risk and stable by many traditional investors.
A previous report by JPMorgan revealed that institutional investors are more interested in BTC investment opportunities. The report shows that Bitcoin’s volatility reduced last year, a likely consequence of more liquidity in markets provided by new investors. This presents a positive change for the cryptocurrency, although it is still five times more volatile than traditional markets.
“While we cannot exclude the possibility that the current speculative mania will propagate further pushing the Bitcoin price up toward the consensus region of between $50,000-$100,000, we believe that such price levels would prove unsustainable.”
The analysts also believe that the accumulation of gold as an alternative currency implies big upside for Bitcoin over the long term. Gold has often been looked as the alternative to stock markets due to its scarcity, among other factors.