$146,000 per Bitcoin Is An ‘Unsustainable’ Price Target for This Year: JPMorgan Chase Strategists
However, these targets of $50,000-$100,000 are achievable in the long term, it said.
According to JPMorgan Chase, as a competition to gold as an asset class, Bitcoin has the potential to reach as high as $146,000.
Bitcoin’s current market cap is around $597 billion and in order to reach yellow metal’s market cap levels, the digital asset’s price would have to surge about 370% in value from its current price of $32,000 BTC -1.00% Bitcoin / USD BTCUSD $ 48,740.52
-$487.41-1.00% Volume 55.35 b Change -$487.41 Open $48,740.52 Circulating 18.71 m Market Cap 912.01 b 22 h 70% Bitcoin Mining Pools Give Signal to Taproot’s Second Attempt 22 h Ether Will “Keep Gaining Market Share Relative to Bitcoin,” Says Pantera Capital 23 h Aker ASA Considering Accepting Bitcoin as Payment; Elon Musk’s Remarks Change Nothing .
The largest digital asset rallied more than 315% in 2020 and is expected to see even a bigger uptrend this year as institutions join in full force, but not according to the investment banking giant.
BTC needs to rise by 4.6 times in order to match the total private sector investment in the precious metal via exchange-traded funds (ETF), bars, and coins; but it all depends on institutional investment that will take some time, strategists led by Nikolaos Panigirtzoglou wrote in a note on Monday.
“A crowding out of gold as an ‘alternative’ currency implies big upside for Bitcoin over the long term.”
“… a convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is in our mind a multiyear process. This implies that the above-$146,000 theoretical Bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.”
#Bitcoin's competition w/gold has already started as evidenced by >$3bn of inflows into Grayscale Bitcoin Trust & >$7bn of outflows from Gold ETFs since Oct, JPM says: Competition w/gold as alternative currency will continue given millennials will become over time more important. pic.twitter.com/lkXmDIN9e4
— Holger Zschaepitz (@Schuldensuehner) January 4, 2021
As we reported, just yesterday, Anthony Scaramucci, the founder of SkyBridge Capital launched the Bitcoin Fund. The company in its thesis noted that Bitcoin, which is better at being gold than gold itself, can climb to $535,000 to achieve the same market cap as bullion.
The company also predicted a “tidal wave of institutional capital,” including hedge funds (One River Asset Management), public company treasurers (MicroStrategy), insurance companies (MassMutual), pension funds, RIAs, banks and brokerage firms, and a Bitcoin ETF.
For now, speculative long positions and an increase in wallets holding small amounts of BTC showing potential are seen as the headwinds by JPMorgan.
“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.”