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October 3, 2022
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JPMorgan says Bitcoin could rise to $ 100,000 and leaves an important warning in the air

For JPMorgan, such a rapid rise in Bitcoin would be “unsustainable”

Bitcoin’s 300% hike in 2020 may repeat itself this year, but such a bullish move would be unsustainable, JPMorgan said in a note on Monday.

“While we cannot rule out the possibility that the current speculative craze will spread further, pushing the price of bitcoin into the consensus region between $ 50,000 – $ 100,000, we believe that such price levels would prove unsustainable,” said the note.

Bitcoin rose to almost $ 35,000 on Sunday, before dropping 17% on Monday, its sharpest drop since March.

JPMorgan still sees Bitcoin competing with gold as an “alternative” currency, with younger investors preferring “digital gold” to traditional gold and driving demand for cryptocurrency.

With a market value of $ 575 billion, Bitcoin would have to rise to $ 146,000 to match the total private sector investment in gold through exchange-traded funds or bars and coins, the note said.

But this long-term growth target based on Bitcoin becoming as valuable as the gold market is based on institutions that are comfortable with the volatility associated with crypto as it occupies a place in their portfolios. For risk management purposes, a less volatile Bitcoin would likely lead to greater adoption among institutions.

“Therefore, it is unrealistic to expect allocations to Bitcoin by institutional investors to match those of gold without a convergence in volatilities. It is unlikely that a convergence in volatilities between Bitcoin and gold will happen quickly and, in our mind, it is a multi-year process, ”said JPMorgan.

“We believe that the valuation and position landscape became much more challenging for Bitcoin at the beginning of the new year,” he added.

Another analyst who sees Bitcoin reaching $ 100,000 is Tom Lee of Fundstrat, who said last week that the crypto could quadruple in 2021 as he experiences a parabolic recovery similar to 2017.

Source: Markets Insider

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