JPMorgan predicts Bitcoin will reach $146,000 and says Bitcoin is very similar to gold

JPMorgan Chase has updated its long-term price target forecast for Bitcoin — $146,000 — a target that first made waves in financial markets in January.

JPMorgan Chase said that in the eyes of investors, Bitcoin is increasingly looking like a digital alternative to gold.

It said cryptocurrencies “are an emerging asset class and as such are in a multi-year structural uptrend.”
JPMorgan recently published an in-depth study of digital assets, and it has cryptocurrency enthusiasts very excited — albeit with some caveats.
The largest U.S. bank predicts that if volatility subsides and financial institutions begin to favor bitcoin over gold in their portfolios, bitcoin could surge to $146,000 in the long term. That’s about 130% higher than bitcoin’s price of $63,160 on Wednesday.
JPMorgan believes that Bitcoin, which is also a scarce product, is increasingly competing with gold for investor attention as a hedge against inflation. (That is, it will rise even if inflation erodes the value of other assets.)
“The resurgence of inflation concerns among investors during September/October 2021 appears to have rekindled interest in using Bitcoin as an inflation hedge,” said Nikolaos Panigirtzoglou, a strategist at JPMorgan Chase & Co.
"Bitcoin's appeal as an inflation hedge may have grown as gold has failed to respond to heightened inflation concerns in recent weeks," he said. Inflation in the United States is at its highest level in 13 years and is surging around the world.
Panigirtzoglou said there is “no doubt” that the competition between coins and gold will continue as millennials become more powerful in the investment space due to their preference for cryptocurrencies.
“Given how large the financial investment in gold is, any move to crowd out gold as an ‘alternative’ currency implies long-term upside for Bitcoin,” he said, with a long-term price target of $146,000.
However, JPMorgan said that for a price of $146,000 to be achieved, Bitcoin’s massive volatility would have to drop dramatically so that rule-bound investors could feel comfortable adding it to their portfolios. Bitcoin’s volatility is currently about four to five times that of gold. That number would have to drop significantly before institutional investors would jump in.

JPMorgan Chase & Co. has included a major caveat to its “theoretical” price target, saying bitcoin’s volatility is a major obstacle to sustainable price gains. The bank said its reputation among institutional investors took a hit during the boom and bust in April and May.

In fact, JPMorgan believes that volatility is such a big problem that the current reasonable price for Bitcoin is actually around $35,000. However, the bank says that the volatility of the coin is currently decreasing and a price of $73,000 next year looks reasonable.
However, Bitcoin is highly unpredictable. Given that Bitcoin has rallied more than 340% in the last year, a surge to over $146,000 seems entirely possible. But the bank said it is also possible that it could drop below $30,000 again, as it did in the summer. Either way, JPMorgan's global market strategists appear bullish on cryptocurrencies. "There is no doubt that cryptocurrencies and digital assets more broadly are an emerging asset class and, as such, are in a multi-year structural uptrend," they said.

Digital assets have become clear winners after the pandemic. (NetEase)