Bitcoin to rival gold, price could lift to USD 146,000, Reuters

Wednesday 6 January 2021 14:41 CET | News

Investment bank JP Morgan has said that digital currency Bitcoin has emerged as a rival to gold and could trade as high as USD 146,000 if it becomes established as a safe-haven asset, according to Reuters

Interest in Bitcoin has soared in 2020, with investors viewing Bitcoin as a hedge against inflation and an alternative to the depreciating dollar. The rush led to Bitcoin prices more than tripling in the past six months to a record peak of USD 34,800 on 2 January 2020. JP Morgan said that ‘Bitcoin’s competition with gold has already started in our mind’, citing recent USD 7 billion outflows from gold and more than USD 3 billion of inflows into the Grayscale Bitcoin Trust.

Bitcoin is likely to outshine gold as millennials become a more important component of the investment market over time and given their preference for ‘digital gold’ over traditional bullion. With a market capitalisation of USD 575 billion, the Bitcoin price would need a nearly fivefold jump to USD 146,000 to match the value of private gold wealth held in gold bars, coins, or exchange-traded funds, the bank added. JP Morgan strategists said the upside is conditional on the volatility of Bitcoin converging with that of gold in the longer term.

Though JPM sees the possibility of ‘current speculative mania’ propelling bitcoin to between USD 50,000 and USD 100,000, it warned that such levels would prove unsustainable until its volatility levels out.

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Keywords: Bitcoin, Gold, digital currency, digital gold, JP Morgan, investment bank, trade, Grayscale Bitcoin Trust, cryptocurrency
Categories: DeFi & Crypto & Web3
Countries: World
This article is part of category

DeFi & Crypto & Web3