JPMorgan Chase, one of the world’s biggest investment banks predicts the next year will see heady new highs with Bitcoin price to $146K, driven by a new class of crypto savvy millennial investors.
This prediction comes after the bank initially predicted that the digital asset would plunge from its current level to what it called a fair price of $35K
The bank’s team of strategists, led by Nikolaos Panigirtzoglou is reported by Business Insider to have shared this prediction in a clients’ note. According to JPMorgan, BTC is a scarce asset that has been increasingly competing against gold as an inflation hedge. Panigirtzoglou noted that the resurgence of inflation concerns among investors in September and October renewed interest in the adoption of BTC as an inflation hedge.
Bitcoin’s allure as an inflation hedge has perhaps been strengthened by the failure of gold to respond in recent weeks to heightened concerns over inflation.Nikolaos Panigirtzoglou, JP Morgan Chase Strategist
With inflation hitting a 13-year high in the US, investors are increasingly seeking alternative investment options. While gold has been the dominant inflation hedge, JPMorgan believes a shift is in order. The strategists claim the increasing number of millennials in the investing universe and their preference for digital assets will see BTC continue competing with gold.
BTC’s volatility must fall to attract more investors
Panigirtzoglou pointed out that the investment in gold is vast. Should investors start shifting from gold and embracing alternative assets, he believes flagship crypto will experience a massive upside. However, BTC’s volatility, which is currently four to five times higher than gold, would have to subside sharply before mainstream investors enter its market.
Nonetheless, the bank seems bullish on crypto, with its strategists saying,
Digital assets have emerged as a clear winner post the pandemic, with retail investors joining institutional investors such as family offices, hedge funds and real money asset managers including insurance companies in propagating the asset class.
However, if BTC fails to shake off its volatility, JPMorgan believes the coin might slump to its fair prediction of $35,000.00 (£26,027.92). The bank previously said BTC surging to $100,000.00 (£74,351.00) is not practical and instead set the best-case scenario price for BTC at $73,000.00 (£54,276.23).