Bitcoin at prices above US$ 100,000 still depends on the behavior of the gold market, according to JP Morgan.
Experts from world leader in financial services JPMorgan Chase & Co. have published a forecast that Bitcoin may reach US$ 146,000 – or R$ 780,000 at current exchange rates – in the long term.
According to a Bloomberg article, BTC’s market capitalization, currently valued at $575 billion, would have to increase 4.6 times to reach this price target. The behavior of the gold market will also be decisive for the growth of Bitcoin. The text says:
„The market capitalization of the Bitcoin of about $575 billion would have to increase 4.6 times – based on a theoretical price of $146,000 – to match the total private sector investment in gold through exchange-traded funds or bars and currencies,“ strategists led by Nikolaos Panigirtzoglou wrote in an article. But this perspective depends on Bitcoin converging with gold volatility to encourage more institutional investment, a process that will take some time, they argued.
Despite Bitcoin’s large price appreciation in 2020, the strategists remain cautious about a high cryptomeda parabolic.
Since December 2020, when Bitcoin broke the record of $20,000 and entered the phase of price discovery, with no historical basis to note the levels of resistance. In the last three weeks, the currency reached $34,000 before a correction this week.
Nevertheless, Bitcoin’s quest for exorbitant prices is still a race to the bottom, which should take time. The strategists write:
„The elimination of gold as an alternative ‚currency‘ implies great advantages for Bitcoin in the long run. (However,) it is unlikely that a convergence in the volatilities between Bitcoin and gold will happen quickly and, in our analysis, it is a process of several years. This implies that Bitcoin’s theoretical price target above $146,000 should be considered a long-term goal and therefore an unsustainable price target for this year“.
The strategists still write that the price forecasts for this year, reaching US$ 100,000 – or R$ 529,000 – also do not sustain themselves, although big investors like Paul Tudor Jones confirm this bet. They conclude:
„The valuation and forecast scenario has become much more challenging for Bitcoin at the beginning of the new year. Although we cannot exclude the possibility that the current speculative mania will spread, pushing even further the price of Bitcoin to the consensus region between US$ 50,000 and US$ 100,000, we believe that such price levels would prove unsustainable“.
According to data from Cointelegraph Markets, Bitcoin is quoted this Tuesday at an average of US$ 32,000 in global exchanges. In Brazil, the price of the largest cryptomeda reaches US$ 172,000.