Why JPMorgan is aiming for $130,000 on Bitcoin
JPMorgan sets a long-term price goal of 130,000 dollar for Bitcoin (BTC), hoping that the capitalization of the queen of cryptocurrencies catches up with the amount invested in gold by private institutional investors.
The bank shows the theoretical target by assuming that the capitalization of Bitcoin catches up to the amount invested in gold by private institutional investors, i.e. outside the Central Bank. According to JPMorgan, there is little question that rivalry with gold as a “alternative” currency will continue in the coming years.
However, the bank warns that the volatility of each asset class is essential in terms of portfolio risk management for most institutional investors. In fact, the greater an asset class’s volatility, the more capital that the asset class consumes. Without a convergence of volatility, it is impractical to expect Bitcoin allocations by institutional investors to match those of gold.
JPMorgan sees declining currency volatility as an added benefit for institutional investors. At the time of publishing, the share price has surpassed $ 60,000. The price is still extremely volatile, but this is diminishing. That is good news for conventional investors who would rather not invest in a risky asset that has dropped 30% in a week.
JPMorgan anticipates the bitcoin price of 130,000 dollar as it devours the gold sector. This is particularly relevant to private gold investors. The bitcoin market currently accounts for approximately 9.8 percent of the overall gold market.
The bank went a step further in a recent paper. If bitcoin takes over the entire gold market as a speculative asset, the price per BTC would be well above $ 540,000. That is not a hard price target for the bank, but rather a simple estimate based on the current gold market divided by the maximum number of bitcoins available (21 million).
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