Investment banking giant JPMorgan has called a long-term bitcoin price target of over $146,000 based on the assumption that the cryptocurrency will grow in popularity as an alternative to gold, Bloomberg reports.
â€œA crowding out of gold as an â€˜alternativeâ€™ currency implies big upside for bitcoin over the long term,â€ strategists led by Nikolaos Panigirtzoglou wrote in a note on Monday. â€œBitcoinâ€™s [current] market capitalization of around $575 billion would have to rise by 4.6 times â€“ for a theoretical Bitcoin price of $146,000 â€“ to match the total private sector investment in gold via exchange-traded funds or bars and coins.â€
However, analysts argued that bitcoinâ€™s price volatility needs to drop for institutions to make large allocations. The convergence of bitcoin and gold volatilities is a â€œmulti-year processâ€ and suggests that the $146,000-plus target is a long-term objective, JPMorgan noted.
Bitcoin rallied by 300% to $29,000 in 2020 and extended gains to a new record price of $34,420 in the first three days of the new year. The cryptocurrency has gained over 160% in the last three months alone, helped along by increased institutional participation.
While the crypto community expects the rally to continue, JPMorgan sees signs of â€œspeculative maniaâ€ and believes further big gains towards the region of $50,000-$100,000 may be unsustainable in the near term.