Bitcoin’s almost uninterrupted rise to new records has caught Wall Street’s attention like few recent titles.
The world’s No. 1 digital asset was recently trading near $ 32,000 in stock on Tuesday, for the last time, but the JPMorgan Chase JPM team,
let’s face it, blockchain-backed cryptocurrency could be valued at $ 146,000 in the not-so-distant future, if it can continue to push demand away from gold buyers, as bank researchers think is already happening.
Analysts point to the outflow of funds traded on gold-linked exchanges, or ETFs, and income from Grayscale-sponsored digital currency-focused trusts, for example, as part of the evidence pointing to greater use of bitcoin as gold-like security, which would help drive its price into the stratosphere.
“Bitcoin’s competition with gold has already begun in our minds, as evidenced by the more than $ 3 [billion] of the entries in the Bitcoin Trust grayscale and the more than $ 7 billion in Gold ETF outflows since mid-October ”(see attached chart):
via JPMorgan
JPMorgan says that, by a measure, Bitcoin currently consumes 3.4 times more venture capital than gold and more than 5 times more, if you compare the degree of gray Bitcoin Trust with GBTC,
the SPDR Gold Shares GLD,
the largest gold ETF per asset.
Bitcoin BTCUSD,
should currently increase 4.6 times from the current market capitalization of about $ 575 billion (outstanding coins in circulation multiplied by the price per unit) to imply a bitcoin price of $ 146,000 “to match total private sector investment in gold through ETFs or bars and coins, ”wrote JPMorgan’s strategic team, including Nikolaos Panigirtzoglou, Mika Inkinen and Nishant Poddar.
The researchers also said they expected interest in Bitcoin to come largely from younger investors.
Read: Opinion: Bitcoin is heading for a shortage of supply, and this will continue to drive up prices
“There is no doubt that this competition with gold as an‘ alternative ’currency will continue for years to come, as millennials will become over time a more important component of the investor universe and given their preference for “digital gold” over traditional gold, ”the research team wrote in the published research dated Monday.
The only major impediment to Bitcoin’s rising prices and that will likely make its prices fragile is its volatility.
“But this long-term rebound based on an equating of bitcoin’s market capitalization to that of gold for investment purposes is conditioned on the volatility of bitcoin converging to that of gold in the long run,” they write the investigators.
Investors have been drawn to the narrative that Bitcoin could act as a storehouse of wealth amid rampant central bank money impressions last year to bolster the economic recovery from the coronavirus pandemic.
PayPal PYPL,
has recently allowed users of its platform to buy bitcoins, as well as other sister cryptocurrencies such as Ethereum ETHUSD’s Ether Coins,
Bitcoin Cash BCHUSD,
and Litecoin LTCUSD,
Square SQ,
The popular Cash app also allows users to buy and sell bitcoins.
Bitcoins enjoyed a notable rise in 2020 compared to other assets. Bitcoins have already risen 12% so far in 2021, compared to a 3% gain in the price of GC00 gold,
OR,
based on the most active gold futures contract, for January. Meanwhile, the DIA Jones Industrial DJIA,
the S&P 500 SPX index,
and the Nasdaq Composite COMP,
all are lower at this time of year.