- According to JPMorgan, Bitcoin could potentially reach at the level of $1,46,000 in the long term
- Several are getting in the cryptosphere considering Bitcoin as an inflationary hedge, whereas several considers it as an unsustainable bubble
- Currently, valuation and position backdrop are the most significant challenge faced by BTC
Recently, JPMorgan Chase $ Co., claimed that the leading cryptocurrency has the potentiality to surge at the level of $1,46,000 in the longer time frame. The firm also revealed that the total market capitalization of Bitcoin needs to surge by a minimum of 4.6 times to achieve that price level. However, the main reason that will imply a significant surge in Bitcoin seems to be the crowding out of gold towards the most famous crypto token as an asset class. Indeed, the firm also mentioned that quickly we could witness a convergence between gold and Bitcoin.
Bitcoin needs time to encourage more institutional investors
According to strategists led by Nikolaos Panigirtzoglou, MD at JPMorgan, the market capitalization of Bitcoin needs to surge by 4.6 times to achieve a price level of $1,46,000. If the market cap rises according to the estimation, then the coin designed by Satoshi Nakamoto will match the total private sector investment in gold in all ways. However, the outlook depends on the convergence in volatilities of both Bitcoin and gold. Indeed, the process doesn’t seem to happen in a short-term.
An inflationary hedge or an unsustainable bubble?
In recent months, more institutional investors and several noted millionaires and investors have either started allocating their funds into the world’s most famous cryptocurrency or have claimed that they are open to doing so. This interest followed after several consider that the crypto token offers a hedge against the US dollar’s weakness and acts as an inflation hedge in a world flooded with fiscal and monetary stimulus. On the other hand, several are considering Bitcoin as an unsustainable bubble, retail investors and trend followers are pumping that.
Challenging valuation and position backdrop
The strategists firm sees headwinds for Bitcoin, with signs like the growth of speculative long positions and increased wallets holding small amounts of BTC. According to the strategists, Bitcoin is facing challenges since the beginning of this year, regarding the valuation and position backdrop. Although it’s unpredictable whether the current speculative mania will push the price of Bitcoin toward the consensus level between $50,000 and $1,00,000, it is believed that such level of price would prove unsustainable.
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