Investment banking giant JPMorgan has called a long-term bitcoin price target of over $ 146,000 based on the assumption that the cryptocurrency will gain popularity as an alternative to gold, Bloomberg reports.
“A foreclosure of gold as an ‘alternative’ currency means a big advantage for bitcoin in the long run,” strategists led by Nikolaos Panigirtzoglou wrote in a note on Monday. “Bitcoin [current] a market cap of around $ 575 billion would need to be multiplied by 4.6 – for a theoretical Bitcoin price of $ 146,000 – to equal the total private sector investment in gold through exchange-traded funds or ingots and coins.
However, analysts have argued that bitcoin’s price volatility must drop for institutions to make large allocations. The convergence of bitcoin and gold volatilities is a “multi-year process” and suggests that the goal of over $ 146,000 is a long-term goal, JPMorgan noted.
Bitcoin rose 300% to $ 29,000 in 2020 and extended gains to a new all-time high of $ 34,420 in the first three days of the new year. The cryptocurrency has gained over 160% in the past three months alone, aided by increased institutional participation.
As the crypto community expects the rally to continue, JPMorgan sees signs of a ‘speculative mania’ and believes that further large gains in the $ 50,000-100,000 region may be unsustainable in the near term.