Global investment bank JPMorgan has doubled down on its bitcoin price prediction of $146,000. However, the bank’s analyst outlined several price-points ranging from $30,000 to the elusive 6-digit figure, providing a somewhat muddy technical picture.
The analyst explained the prices could hit the upper bound if its volatility subsides and institutional investors start pouring money into bitcoin more so than gold in their portfolios.
JPMorgan released a report of its new publication last week focusing on the alternative investment forecast, including cryptocurrencies. The report is expected to be updated every two to three months.
Analyst Nikolaos Panigirtzoglou predicted that $146,000 is the long-term expectation, with a ‘short-term’ price target of $73,000 for 2022. Bitcoin is just 3.7% away from this target at the time of publishing.
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The analyst explained:
Digital assets are on a multi-year structural ascent, but the current entry point looks unattractive in our opinion for an investment horizon of 12 months as bitcoin appears to have returned to overbought territory,” he explained.
The re-emergence of inflation concerns among investors during September/October 2021 appears to have renewed interest in the usage of bitcoin as an inflation hedge. Bitcoin’s allure as an inflation hedge has perhaps been strengthened by the failure of gold to respond in recent weeks to heightened concerns over inflation.
Panigirtzoglou expects that Bitcoin’s store-of-value narrative will propel competition against gold as more millennials show their preference for crypto.
Considering how big the financial investment into gold is, any such crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term,” he explained.
However, the JPMorgan analyst said that for the $146,000 price prediction to come true, bitcoin’s volatility would have to fall significantly. Presumably, this is so that investors that operate within the sphere of endless red-rape masquerading as investor protection can opt in safely.
He noted that volatility is currently about four to five times higher than that of gold. Strangely, the report added that Bitcoin’s fair price is $35,000 accounting for volatility. This is a far cry from PlanB’s stock-to-flow model, which sets Bitcoin’s fair value price at $100,000.
Regardless of these ‘fair-value-price’ differentials, the bank noted that $73,000 looks reasonable as a target for 2022. The analyst conceded that his analysis may be completely wrong since, saying that a surge above $146,000 and a plunge to below $30,000 are both possible.
The JPMorgan analyst added:
There is little doubt that cryptocurrencies and digital assets more broadly are an emerging asset class and thus on a multi-year structural uptrend. Digital assets have emerged as a clear winner post the pandemic, with retail investors joining institutional investors such as family offices, hedge funds and real money asset managers including insurance companies in propagating the asset class.
This is not the first time JPM has predicted a $146,000 Bitcoin. The bank made this price-prediction earlier this year, citing that bitcoin could compete with gold.
The market cap of bitcoin at $575 billion currently would have to rise by x4.6 from here, implying a theoretical bitcoin price of $146K, to match the total private sector investment in gold via ETFs or bars and coins, they said.
JPMorgan recently explained that “the perception of bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into bitcoin funds since September.” Moreover, institutional investors are dumping gold for bitcoin seeing it as a better inflation hedge.
JPM CEO Still doesn’t Like Bitcoin
Meanwhile, the JPM CEO Jamie Dimon has continued to rail against bitcoin, so-far having been proven wrong on the asset for years. In October, he said the crypto was worthless and questioned its limited supply, even though this supply is publicly accounted for. He advised people to stay away from crypto. At the same time, the firm’s clients want to invest in the asset, the pressure of which has resulted in the bank offering crypto investments to clients.
Recently, entrepreneur and venture capital Peter Thiel also stated that the Federeal Reserve did not take inflation fears into consideration, which has shown up in the price of Bitcoin and cryptocurrencies. Thiel regrets not purchasing more Bitcoin and pressured the government to notice that central banks are in a crisis moment. Thiel’s Palantir technologies is considering to add more Bitcoin to its balance sheet as the asset eclipses $1.2 trillion in market cap.
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