Bitcoin can reach $ 146,000
Bitcoin can reach $ 146,000

Bitcoin's staggering rise of more than $ 30,000 shocked Wall Street, and one of the largest investment banks in the United States believes that digital currencies can continue to rise.

JPMorgan Chase set a bold long-term rate for Bitcoin. The cryptocurrency can reach $ 146,000 because it competes with gold as an alternative currency.

But there is a problem: It is calculated by multiplying the price by the total number of currencies in circulation, as Bitcoin's market cap currently exceeds $ 575 billion.

JPMorgan expects a 4.6x increase to coincide with $ 2.7 trillion in gold investments for the private sector.

In order for Bitcoin's market value to reach this level, price volatility needs to be greatly reduced in order to give institutional investors the confidence to make big bets.

Cryptocurrencies are known for their extremely high volatility, dropping below $ 30,000 within a few days of reaching this level on Monday.

Strategists at JPMorgan write: This long-term bullish trend is based on the equation of Bitcoin's market value against gold for investment purposes, and the hypothesis is the long-term volatility and volatility of Bitcoin from gold.

Bitcoin's current rally is very different from the bubble in late 2017, when the bubble reached nearly $ 20,000 and reached $ 3,122 the following year when investors began buying, which was seen as a major boost to confidence in digital assets.

Skeptics believe that Bitcoin's recovery in 2020 - with growth of more than 300% - reminds us of market direction in 2017, and they see it as a speculative asset that has no intrinsic value as it could be at some point. Glowing bubbles.

However, JPMorgan Chase said: There is no doubt that the difference between 2020 and 2017 is the institutional flow to Bitcoin and the volatility between Bitcoin and Gold is unlikely to converge quickly and will continue for several years.

He added: This means that the theoretical target price for Bitcoin above $ 146,000 should be seen as a long-term goal, and therefore the target price for this year is not sustainable.

Many institutional investors use investment tools (such as the Grayscale Bitcoin Trust) to buy digital currency.

According to JPMorgan, more than $ 3 billion has been deposited with the Grayscale Bitcoin Trust since mid-October, while gold ETFs have decreased by $ 7 billion.

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