The long-term target for popular cryptocurrency is $ 146k, according to JPMorgan Chase & Co., which argues that Bitcoin can have significantly more earning potential as it competes with gold for investment flows.
In the note of strategists led by Nikolaos Panigirtzoglou, Bitcoin's market value must increase 4.6 times from today's $ 575 billion to cover the total private sector investment in gold as ETFs or bullion and coins. In this case, the theoretical price of 146 thousand dollars emerges.
However, JPMorgan strategists state that this outlook is dependent on Bitcoin's volatility approaching gold's volatility to attract more institutional investment, and this process will take some time.
"Considering gold as an alternative currency implies that Bitcoin has a serious upward potential in the long run." However, it was stated that the convergence of the volatility of Bitcoin and gold would probably not be fast and could take years.
Considering this situation, it is underlined that the theoretical Bitcoin price target of over 146 thousand dollars should be considered as a long-term target.
Bitcoin fell 17 percent in transactions on Monday, the hardest since March, after surpassing $ 34,000 for the first time in history over the weekend. The turmoil seen in the cryptocurrency with the highest market value, which quadrupled its price last year, reminds that it is famous for its sharp price movements.
Institutional investors and renowned investors from Paul Tudor Jones to Scott Minerd and Stan Druckenmiller made statements that they either bought Bitcoin or could do it. While some argue that cryptocurrencies offer hedging in the face of the dollar's weakness and inflation risk in an environment of abundant financial and monetary incentives, others think retail investors and trend-following quant funds inflate an unsustainable bubble.
JPMorgan is seeing some downsides for Bitcoin for now. Indicators indicating the accumulation of speculative long positions and the increase in investment wallets carrying small amounts of Bitcoin, indicating that foam may have formed.
The strategist note, which stated that valuation and position status became much more challenging for Bitcoin at the beginning of the new year, includes the following statement:
"While we do not rule out that the current speculative frenzy could push Bitcoin's price towards a market view of between $ 50k and $ 100k, we believe these price levels will be unsustainable."
Bitcoin rose 3.3 percent at 12.40 at Tokyo time to $ 32,056. The Bloomberg Galaxy Crypto Index rose 1.8 percent.
