Bitcoin’s almost relentless climb to new records has caught the attention of Wall Street as very few other securities as a recent reminder.
The world’s No. 1 digital asset recently traded at around $ 32,000 in action Tuesday, at the last survey, but the team at JPMorgan Chase JPM,
assume that the blockchain-backed cryptocurrency could be valued at $ 146,000 in the future, if it can continue to pull demand away from gold buyers, as the research at the bank believes that is already happening.
The analysts identify outflows from gold-pegged trading assets, or ETFs, and enter into digitally-focused money-backed trusts with Grayscale, for example, as part of the evidence indicating an increased use of bitcoin as a gold-like security, which would help move its price further into the stratosphere.
“Bitcoin’s competition with gold has already started in our minds as can be seen from over $ 3 [billion] of inflows into the Grayscale Bitcoin Trust and over $ 7bln of outflows from Gold ETFs from mid-October, ”(see attached card):
through JPMorgan
JPMorgan states that, by one measure, bitcoin currently consumes 3.4 times more risk capital than gold and more than 5 times more, if it compares the Bitcoin Grayscale Trust against GBTC,
the GLD SPDR Gold Coins,
the largest gold ETF by asset.
Bitcoin BTCUSD,
currently it would have to rise 4.6 times from the current market capitalization of around $ 575 billion – unpaid coins in circulation multiplied by the price per unit – to raise the bitcoin price of $ 146,000 a match “to match the private sector’s total investment in gold through ETFs or bars and coins,” wrote JPMorgan’s strategy team, including Nikolaos Panigirtzoglou, Mika Inkinen and Nishant Poddar.
The researchers also said they expect interest in bitcoin to come largely from younger investors.
Read: Comment: Bitcoin is headed for supply shortages – and that will continue to push up prices
“There is little doubt that this competition with gold as’ other ‘currencies will continue in the years to come as millennials will over time become a more important part of the investor universe and with their choice to’ digital gold rather than traditional gold, ”the research team wrote in its research reported Monday.
The only major obstacle to rising bitcoin prices and one that is likely to cause its price to move is volatile.
“But this long-term upside is based on parity of bitcoin market potential with gold for investment purposes dependent on bitcoin volatility catching up with gold in the long run,” the researchers say writing.
Investors have been lured to the report that bitcoin could be a source of wealth amid the printing of central bank money in the past year to support an economic recovery from the disease coronavirus spread.
PayPal PYPL,
recently allowed users on its platform to purchase bitcoin, as well as other sister cryptos such as Ether Ethereum ETHUSD coins,
Bitcoin Cash BCHUSD,
and Litecoin LTCUSD,
SQ Square,
the popular Cash App also allows users to buy and sell bitcoins.
Bitcoins had an incredible run in 2020 compared to other assets. Bitcoins are already up 12% so far in 2021, compared to a 3% gain for the GC00 gold price,
GOLD,
based on the most active gold revenue contract, for in January. Meanwhile, the Dow Jones industrial average DJIA,
index S&P 500 SPX,
and the Nasdaq Composite COMP,
they are all lower at this time of year.