JPMorgan adjusts its long-term Bitcoin price target to $130,000 ๐จ This article is 3 years old...
JPMorgan adjusts its long-term Bitcoin price target to $130,000
The price of Bitcoin could reach $130,000 in the future, JPMorgan's analysts noted, but this won't happen overnight.
2 min read
Updated: Apr. 2, 2021 at 11:47 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Analysts at American investment bank JPMorgan Chase & Co have updated their long-term Bitcoin (BTC) price expectations to $130,000, according to a note cited by Business Insider yesterday.
Per the note, Bitcoin has become much more attractive to institutional investors over the past few weeks thanks to a decrease in its volatility. Previously, regular massive swings of BTCโs price acted โas a headwind towards further institutional adoption,โ JPMorgan noted, but the interest has recently been โreinvigorated.โ
At the same time, the researchers pointed out that Bitcoinโs โdigital goldโ narrative continues to gain momentum. For example, traditional gold has seen $20 billion in capital outflows since last October while investments in Bitcoin increased by $7 billion during the same period.
โConsidering 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,โ JPMorgan said, adding, โMechanically, the Bitcoin price would have to rise [to] $130,000, to match the total private sector investment in gold.โ
Convergence of volatilities
However, a decrease in goldโs priceโfrom a recent peak of $1,900 to $1,700 todayโhas also negatively impacted Bitcoinโs price target, JPMorgan added. In early January, the bankโs experts placed BTCโs long-term potential somewhere around $146,000, but have lowered it since then.
โThe decline in the gold price since then has mechanically reduced the estimated upside potential for Bitcoin as a digital alternative to traditional gold, assuming an equalization with the portfolio weight of gold,โ the researchers noted.
JPMorgan sees Bitcoin at $146,000 as long-term price target https://t.co/fYcsh7LpFc
— Bloomberg Crypto (@crypto) January 5, 2021
Notably, their long-term price target for Bitcoin is based on the notion that BTCโs volatility would continue to decrease and will ultimately โconvergeโ with goldโs at some point. However, the coin still has a long road ahead of it before that happens. Recently, Bitcoinโs three-month realized volatility amounted to 86%โcompared to goldโs 16%.
โA convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is likely a multi-year process. This implies that the above $130,000 theoretical Bitcoin price target should be considered as a long-term target,โ JPMorgan concluded.
As CryptoSlate reported recently, other crypto market analysts have similarly stated that Bitcoin is not โin a bubble.โ
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Liam Frost
Liam Frost is a freelance journalist and editor with over 15 years of experience working for various media outlets across the world.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
JPMorgan
JPMorgan Chase & Co is a global leader in financial services, offering solutions to the world’s most important corporations, governments, and institutions in more than 100 countries.
