Bitcoin’s near-non-stop ascent to new records has caught the attention of Wall Street like few other securities in recent memory.
The world’s # 1 digital asset recently traded at about $ 32,000 in action on Tuesday, at the last check, but JPMorgan Chase JPM’s team,
Advocates that the blockchain-backed cryptocurrency can be valued at $ 146,000 in the not-so-distant future, if it can continue to pull demand from gold buyers, as the bank’s researchers believe it is already happening.
The analysts point to an outflow of gold-linked exchange-traded funds, or ETFs, and inflows into a digital currency-focused trust sponsored by Grayscale, for example, as part of the evidence pointing to increasing use of bitcoin as a gold-like security. which would help drive the price further up the stratosphere.
Bitcoin’s competition with gold has already begun in our minds, as evidenced by the more than $ 3 [billion] of the inflows into the Grayscale Bitcoin Trust and the more than $ 7 billion in outflows from Gold ETFs since mid-October, “(see accompanying chart):
via JPMorgan
JPMorgan says bitcoin currently consumes 3.4 times more venture capital than gold and more than 5 times more if we compare the grayscale Bitcoin Trust with GBTC,
the SPDR Gold Shares GLD,
the largest gold ETF by asset.
Bitcoin BTCUSD,
should currently rise 4.6 times from the current market cap of about $ 575 billion – coins outstanding in circulation multiplied by the unit price – to imply a bitcoin price of $ 146,000 ” to total private 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: Advice: Bitcoin is headed for a stock shortage – and that will continue to drive prices up
“There is little doubt that this competition with gold as an ‘alternative’ currency will continue for years to come, as millennials will become a more important part of the investor universe over time and given their preference for ‘digital gold’ over traditional gold,” wrote the research team in the study reported on Monday.
The only major impediment to bitcoin’s price rise and one that is likely to make price movements vulnerable is its volatility.
“But this long-term benefit, based on an equation of bitcoin’s market capitalization to that of gold for investment purposes, is dependent on bitcoin’s volatility converging to that of gold in the long run,” the researchers write.
Investors were drawn to the story that bitcoin could act as a repository for wealth amid unbridled central bank money pressures over the past year to support an economic recovery from the coronavirus pandemic.
PayPal PYPL,
recently allowed users on its platform to buy bitcoin as well as other sister cryptos such as Ethereum’s Ether coins ETHUSD,
Bitcoin Cash BCHUSD,
and Litecoin LTCUSD,
Square’s SQ,
The popular Cash app also allows users to buy and sell bitcoins.
Bitcoins saw a notable increase in 2020 compared to other assets. Bitcoins are already up 12% so far in 2021, compared to a 3% gain for the gold price GC00,
GOLD,
based on the most active gold futures contract, for January. Meanwhile, the Dow Jones Industrial Average DJIA,
the S&P 500 index SPX,
and the Nasdaq Composite COMP,
are all lower at this point in the year.