JPMorgan, one of the largest investment banks in the world, mentioned in a note that the $130,000 theoretical Bitcoin price target should be considered a long-term target. The world’s largest cryptocurrency is currently trading near $58,000 with a market cap of more than $1.08 trillion.
According to the research note, the recent decline in Bitcoin’s volatility is attracting institutional investors. The bank highlighted that the price of BTC at $130,000 would match the total private sector investment in gold.
Nikolaos Panigirtzoglou, a strategist at JPMorgan, published a research note in February 2021 and mentioned that Bitcoin’s volatility is a massive issue for large organizations. The bank previously issued a long-term price target of $146,000 for Bitcoin.
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In the latest note, JPMorgan said that the bank’s long-term price target of $130,000 for Bitcoin is predicated on the idea that BTC’s volatility will converge with gold.
“Considering 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. A 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 BTC price target should be considered as a long-term target,” JPMorgan mentioned in the note.
Bitcoin and Gold
Institutional investors around the world have started considering Bitcoin as an alternative to gold. Despite the reason that BTC’s market cap is relatively smaller than gold, consistent outflows were reported in gold-related investment products during the last few months, and strong inflows were reported in the world’s largest digital currency over the same period. Bitcoin recently crossed the 10% market cap of mined gold.
In a Redditt post, Ray Dalio, an American Hedge Fund Manager and Founder of Bridgewater Associates, said that Bitcoin and other digital currencies have established themselves as interesting gold-like asset alternatives in the last 10 years.