JPMorgan Doubles Massive Bitcoin Price Prediction, But Adds Serious Warning

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Bitcoin and cryptocurrencies have taken to Wall Street this year, with many of the biggest banks starting to roll out crypto services.

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The price of bitcoin has risen from around $ 15,000 per bitcoin at this time last year to over $ 60,000 today, causing “soft shocks” that analysts say have deepened over the course of the year. last month.

Now, banking giant JPMorgan JPM has renewed its prediction that bitcoin could more than double to around $ 146,000 in the long run, but has warned that bitcoin’s extreme volatility could push its price down sharply, giving bitcoin a fair value of only $ 35,000.

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“This challenges the idea that a price target of $ 100,000 or more, which appears to be the current consensus for 2022, is a sustainable bitcoin target in the absence of a significant drop in bitcoin volatility. JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note to clients seen by Business Insider. “Digital assets are on a multi-year structural ascent, but the current entry point looks unappealing.”

Many bitcoin and crypto market watchers have predicted that the price of bitcoin will hit $ 100,000 before the end of 2021, in part because of inflation fears pushing investors into so-called safe-haven assets.

Fears that inflation – now at its 13-year high in the United States – may be more persistent than transitory led the Federal Reserve this week to start scaling back its massive pandemic-induced quantitative easing program.

“Digital assets have become a clear winner after the pandemic, with retail investors joining institutional investors such as family offices, hedge funds and real money asset managers, including insurance companies, to spread asset class, ”JPMorgan analysts wrote.

The price of bitcoin has risen by over 300% over the past 12 months, helping the combined cryptocurrency market add around $ 2 trillion to its total value.

“The reappearance of inflation concerns among investors in September / October 2021 appears to have renewed interest in using bitcoin as an inflation hedge,” JPMorgan strategists wrote. “Bitcoin’s appeal as an inflation hedge may have been heightened by gold’s failure to respond to heightened inflation concerns in recent weeks.”

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Bank researchers believe if bitcoin’s volatility continues to decline, a price of $ 73,000 in 2022 is plausible, but its wild swings mean an increase of more than double its current $ 61,000 or even a drop. under $ 30,000 is also a possibility.

However, interest in bitcoin as a replacement for inflation hedging with gold, even to a small extent, could result in a “big bitcoin benefit”.

“Given the importance of financial investment in gold, such a crowding out of gold as an ‘alternative’ currency implies a big advantage for bitcoin in the long run,” Panigirtzoglou wrote, reiterating his previous one. long-term bitcoin price prediction of $ 146,000 per bitcoin. .

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