Bitcoin (BTC) price has soared over the past year, placing the leading crypto in the top 10 assets by total market cap. This means that Bitcoin is too big for analysts at banks like Goldman Sachs, JPMorgan, Bank of America, UBS and Citigroup to ignore. Evaluations and forecasts of the world’s giant banks cryptocoin.com We have prepared for our readers.
What is the view of banks towards the leading cryptocurrency?
Two of these Wall Street giants are setting long-term bullish price targets for the $815 billion cryptocurrency. Zach Pandl, co-head of Goldman’s global FX and EM strategy, charts a path for Bitcoin to eventually reach $100,000, while JPMorgan strategist Nikolaos Panigirtzoglou renews the bank’s high-profile $146,000 target in November.
Bank of America, meanwhile, argues that the cryptocurrency space is now simply ‘too big to ignore’ and states that it includes digital assets in its October 2021 report. Strategist Alkesh Shah comments:
Crypto-based digital assets could create an entirely new class of assets. It’s hard to predict how transformative Blockchain technology, digital assets, and thousands of decentralized applications yet to be created can happen.
However, some financial institutions still maintain a bearish trend on Bitcoin. Swiss bank UBS, which manages $2.6 trillion in assets, considers cryptocurrencies purely speculative even after the launch of more sophisticated investment products like ProShares’ Bitcoin ETF. A team led by the bank’s chief investment officer, Mark Haefele, commented:
We consider direct purchase of cryptocurrencies and tokens only suitable for investors with a high tolerance for risk. While we see potential for technologies that support digital assets, we continue to view cryptocurrencies as speculative.
Bitcoin price predictions of giant banks and their reasons
Goldman Sachs strategists say Bitcoin could reach $100,000 if gold continues to take market share as a ‘store of value asset’. This refers to the idea that more investors will buy Bitcoin as a hedge against inflation, although analysts caution that Bitcoin’s volatility should decline significantly to make it an attractive alternative. In a recent note, Zach Pandl shares his prediction:
Bitcoin’s market share will likely increase over time, most likely as a byproduct of wider adoption of digital assets and possibly due to Bitcoin-specific scaling solutions. If Bitcoin’s share of the ‘store of value’ market rises to 50% in the next five years, its price will rise to just over $100,000.
Zach Pandl states that digital asset markets are much larger than Bitcoin. But he thinks comparing market capitalization to gold can help set parameters for Bitcoin returns to yield reasonable results.
Zach Pandl estimates that Bitcoin’s $700 billion market cap gives it 20% of the ‘store of value market’. Cryptocurrencies have made a comeback since he wrote his note, meaning Bitcoin’s market cap is now just over $800 billion.
JPMorgan argues that investors are increasingly seeing the crypto asset as a digital alternative to gold, and it is renewing its long-term price target of $146,000 in November. According to Nikolaos Panigirtzoglou, the resurgence of inflation concerns among investors in September/October 2021 seems to have renewed interest in the use of Bitcoin for inflation purposes. The strategist explains:
Considering how large the financial investment in gold is, this exclusion of gold as an ‘alternative’ currency is a big bullish for Bitcoin in the long run.
But JPMorgan’s customers are skeptical that Bitcoin will hit all-time highs this year. A recent survey of 47 customers shows that 41% expect digital assets to hit $60,000 by the end of the year, with only 5% predicting it will exceed $100,000 this time.
Citigroup analysts, on the other hand, seem to have considerably overstated investor interest in digital assets, with a 2020 note predicting that Bitcoin will reach $318,000 by December 2021. Tom Fitzpatrick, the bank’s FX technical head, also named Bitcoin ’21. He describes it as ‘century gold’.
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