JPMorgan Gives Bitcoin Stamp of Approval with Latest Valuation

January 06, 2021

Cryptocurrency has been discussed quite a bit over the past decade, especially due to bitcoin’s wild jumps in value that have been widely reported on in financial journalism. Yet despite the popularity in the news, digital currencies really haven’t been widely accepted as legitimate in the finance world. In fact, the CEO of JP Morgan once referred to bitcoin as a “fraud”. However, a recent note to customers by JPMorgan has made it evident that bitcoin now has the potential to compete with the gold standard, giving further credibility to cryptocurrencies as a major player in investing.

According to the note that was released on January 4th, bitcoin has the potential to reach a long-term target price of $146,000, based on a calculation determined by the total number of coins that are currently in circulation. With this prediction, it is certainly possible for bitcoin to compete with more stable and trusted investments like gold. However, this is unlikely to happen in the immediate future.

A strategist for JP Morgan wrote, “A convergence in volatilities between bitcoin and gold is unlikely to happen quickly and is in our mind a multi-year process. This implies that the above $146k theoretical bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.”

Bitcoin is known for its high volatility, and has understandably made investors nervous about making it a part of their portfolios. But the tides seem to be shifting, as more than $3 billion has been added to the Grayscale’s Bitcoin Trust, which acts as an investment vehicle for bitcoin without directly buying them. Gold, on the other hand, has been trending downward, with ETF’s decreasing by $7 billion.

JP Morgan’s estimate of bitcoin’s potential is certainly not an absolute fact, but the mere speculation of bitcoin proves that cryptocurrency is starting to solidify itself as a true asset.

Edited by Maurice Nagle



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