JPMorgan recently published an in-depth analysis of digital assets and, along with a few caveats, paints a promising future for crypto fans.
Largest US bank, volatility declines and institutions in their portfolios bitcoinHe renewed his prediction that the leading cryptocurrency could rise to $146,000 in the long run if it starts to favor gold. This estimate is about 130% above the price at which it is currently traded.
JPMorgan also thinks that Bitcoin, which is a limited supply product, competes with gold as a hedge against inflation. JPMorgan strategist Nikolaos Panigirtzoglou commented:
“The resurgence of inflation concerns among investors in September/October 2021 seems to have renewed interest in the use of Bitcoin for inflation.”
He also thinks that Bitcoin’s appeal as an inflation hedge may have been strengthened by the failure of gold to respond to rising inflation concerns in recent weeks.
Panigirtzoglou, cryptocurrency He said there is “little doubt” that the token will continue to compete with gold as millennials become stronger in the investment universe, given their preferences. “Given how large the financial investment in gold is, this exclusion of gold as an ‘alternative’ currency means a huge boost for Bitcoin in the long run,” he said, noting $146,000 as a long-term price target.
However, JPMorgan said that for the $146,000 price to materialize, Bitcoin’s massive volatility would need to drop sharply so that rule-bound investors can feel comfortable adding it to their portfolios.
Besides, the bank said that Bitcoin’s volatility is currently four to five times higher than gold. This will have to drop dramatically before institutional investors step in.
JPMorgan issued a major warning against its “theoretical” price target, adding that Bitcoin’s volatility is a major barrier to sustained price increases. Indeed, JPMorgan considers volatility to be such a big issue that it currently considers the fair price of Bitcoin to be actually around $35,000. Still, the bank said the token’s volatility is currently down and a price of $73,000 for next year seems reasonable.
However, given Bitcoin’s gains of more than 340% over the past year, an increase above $146,000 seems entirely possible. However, the bank added that another drop below $30,000 is likely, as seen in the summer. Either way, JPMorgan’s global market strategists seem optimistic about crypto.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.