JP Morgan "Bitcoin long-term target price $146,000... Will compete with gold"

"However, volatility is too high... This issue must be resolved to reach the long-term target"
JPMorgan sets current fair value at $35,000... expects $73,000 next year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] JP Morgan, the world's largest investment bank, predicted a long-term target price of $146,000 for Bitcoin, expressing the view that Bitcoin will compete with gold.

Business Insider reported on the 3rd (local time) that JP Morgan's long-term target price of $146,000 is 130% higher than the current price (about $63,000).

According to the report, JP Morgan stated that Bitcoin, which has scarcity due to its limited quantity, will gradually compete with gold and is gaining attention as an inflation hedge.

JP Morgan strategist Nikolaos Panigirtzoglou diagnosed, "Recently, as inflation concerns have been raised, investors are viewing Bitcoin as an inflation hedge."

He added, "The reason Bitcoin has been recognized as an inflation hedge is that gold did not respond to the inflation concerns that have emerged in recent weeks."

Panigirtzoglou said there is "little doubt" that Bitcoin will increasingly compete with gold as a hedge against inflation. This means that even if the value of other assets falls due to inflation, Bitcoin's value will rise.

He also predicted that if institutional investors begin to prefer Bitcoin over gold in their portfolios, the price could surge to $146,000 in the long term.

He presented the long-term target price of $146,000, saying, "Considering how large the financial market's investment in gold is, gold being displaced as an 'alternative' currency would mean a significant rise for Bitcoin in the long term."

However, he also pointed out Bitcoin's tremendous volatility.

JP Morgan analyzed that Bitcoin's volatility is currently about 4 to 5 times higher than gold's.

JP Morgan's analysis is that for institutional investors' funds to flow in and for Bitcoin's price to reach the long-term target price, the volatility issue must first be resolved.

JP Morgan reported that after Bitcoin experienced sharp volatility and price crashes in April and May, trust in Bitcoin among institutional investors has been significantly damaged.

In particular, JP Morgan stated that due to this volatility, Bitcoin's value is currently overvalued and suggested a fair price of $35,000 for now. However, they added that volatility is somewhat easing and expect it to reach $73,000 next year.

JP Morgan said that while Bitcoin's price could reach $146,000 in the long term, "there could also be cases where it crashes below $30,000, like this past summer."

Although volatility concerns have not completely disappeared, JP Morgan remains optimistic about the long-term outlook for cryptocurrencies.

JP Morgan market strategists said, "There is little doubt that cryptocurrencies and digital assets are emerging as a new asset class," and forecast "structural growth over several years."

They also emphasized, "During the recent pandemic period, digital assets surged rapidly," and "institutional investors such as hedge funds, asset managers, and insurance companies have begun to enter the market."