JPMorgan analysts have argued that Bitcoin price could hit $ 146,000 as cryptocurrency’s competition with gold intensifies. The company is now The global strategist sees the current Bitcoin bull run as similar to the 2017 bull run. He warns of three risks that could affect Bitcoin’s outlook for 2021.
JPMorgan sets Bitcoin’s price target at $ 146,000
JPMorgan released a report on the valuation and future outlook of Bitcoin on Monday. “We cannot rule out that the current speculative mania will spread further and push the Bitcoin price upwards in the direction of a consensus region between 50,000 and 100,000 US dollars,” the analysts write. “We believe that such a price level would prove unsustainable.”
They stated, “Bitcoin’s competition with gold has already begun in our eyes, reflected in inflows of more than $ 3 billion into the Grayscale Bitcoin Trust and outflows of more than $ 7 billion from gold ETFs since the middle October shows. ” The report does the following:
Bitcoin’s market capitalization at $ 575 billion would currently have to increase 4.6x from here, implying a theoretical Bitcoin price of $ 146,000 to match the total private sector investment in gold via ETFs or bars and coins.
The analysts added, “It is unlikely that the volatilities between Bitcoin and gold will converge quickly and we think this will be a multi-year process. This implies that the above-mentioned theoretical Bitcoin price target of $ 146,000 should be viewed as a long-term goal. “
JPMorgan strategist says the current Bitcoin bull run is similar to 2017
JPMorgan’s leading global markets strategist Nikolaos Panigirtzoglou, one of the report’s authors, also shared his outlook for Bitcoin for 2021 on CNBC’s Squawk Alley last week.
“I have three risks on my mind,” he began. “The first is the strong consensus that currently exists that Bitcoin price will reach 2021 – $ 50,000 or $ 100,000. We know from other asset classes that an overcrowded consensus rarely comes about as originally intended. “
He continued, “The second risk has to do with the speculative money that exists with both retail and institutional investors.”
Speculative money among retail investors right now is not that dissimilar to what we saw in late 2017.
“Institutional investors have also been building speculative positions over the past few months and we see that in CME Bitcoin futures,” Panigirtzoglou said. “I think it’s wrong to assume that the entire Bitcoin rise this year has been driven by institutional purchases and institutional purchases by long-term institutional investors. There are also speculative institutional investors. “
The third factor he discussed was whether more people will use Bitcoin and more merchants will accept it in 2021. Although the payment giant Paypal promises to make Bitcoin payments possible with its 28 million merchants worldwide, the JPMorgan strategist is still not convinced.
“I don’t think so,” said Panigirtzoglou. “The acceptance of Bitcoin as a payment system as a payment currency depends on regulatory restrictions and permits. As a result, it is hard to imagine here that we will see a massive change on this front in the next year. “
The JPMorgan strategist concluded, “I think what has changed this year is the perception of bitcoin’s digital gold. But as a payment currency it is far from seeing a big change here, but again we don’t need the Bitcoin to become a payment currency for the price to go up. “
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