Global investment bank JPMorgan has doubled down on its bitcoin price prediction of $146K. The bank analyst explained that the price of the cryptocurrency could reach this level if its volatility decreases and institutional investors start investing more in bitcoin than gold in their wallets.
JPMorgan Renews $146K Bitcoin Price Prediction
JPMorgan released an inaugural report of its new publication last week focusing on the outlook for alternative investments, including digital assets. The new report should be released every two to three months.
The firm’s analyst Nikolaos Panigirtzoglou has predicted that the price of bitcoin could reach $146K in the long term, with a short-term price target of $73,000 for 2022.
“Digital assets are on a multi-year structural ascent, but the current entry point looks unattractive in our view for a 12-month investment horizon, as bitcoin appears to have returned to overbought territory,” he said. he explains.
The JPMorgan analyst added: “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.” Reiterating his “bullish outlook” for BTC made in October, he wrote:
Bitcoin’s appeal as an inflation hedge may have been heightened by gold’s failure to respond in recent weeks to heightened concerns about inflation.
Panigirtzoglou expects bitcoin’s competition with gold to continue, especially as more millennials invest, given their preference for cryptocurrencies. “Given the importance of financial investment in gold, such a crowding out of gold as an ‘alternative’ currency implies a big advantage for bitcoin in the long run,” he detailed.
However, the JPMorgan analyst said that for the $146,000 price prediction to come true, bitcoin’s volatility would have to fall significantly, so that rules-bound investors feel comfortable adding the cryptocurrency to their portfolios.
He noted that BTC’s volatility is currently around four to five times that of gold. The report added that the current volatility is such a problem that bitcoin’s fair price is actually around $35,000.
Nonetheless, the bank noted that bitcoin’s volatility is on the decline and that a price of $ 73,000 seems reasonable as a price target for 2022. Furthermore, Panigirtzoglou said that bitcoin is wildly unpredictable and a surge above $146,000 and a plunge to below $30,000 are both possible.
The JPMorgan analyst added: “There is no doubt that cryptocurrencies and digital assets are more broadly an emerging asset class and therefore on a multi-year structural uptrend,” adding:
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 that JPMorgan has predicted that the price of bitcoin could reach $ 146,000. The bank first made this bold long-term price target for bitcoin back in January, citing that bitcoin competes with gold as an alternative currency. The bank explained, “The current bitcoin market cap at $ 575 billion is expected to increase by 4.6 from here, implying a theoretical bitcoin price of $ 146,000, to match the total investment of the private sector in gold through ETFs or bullion and coins. “
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.” Additionally, institutional investors are ditching gold for bitcoin, seeing it as a better hedge against inflation.
Meanwhile, JPMorgan CEO Jamie Dimon has remained skeptical about bitcoin. In October, he said BTC was worthless and questioned its limited supply. He also said bitcoin has no intrinsic value and regulators will regulate the hell of it. In May, The JPMorgan boss personally advised people to stay away from crypto. Dimon said he doesn’t care about bitcoin but his customers are interested. Meanwhile, the firm’s clients see crypto as an asset class that they want to invest in and the bank is now offering various crypto investments to clients.
