The price of Bitcoin has increased by 300% in 2020 and could increase by another 300% in 2021, according to JPMorgan analysts.
It is not uncommon for one of the most respected financial-banking institutions in the world to come up with ultra-optimistic predictions about the value of Bitcoin, but the performance demonstrated so far by the main cryptocurrency can no longer be ignored.
However, JPMorgan analysts also come with a warning for investors eager to diversify their cryptocurrency portfolio:
“While we cannot rule out the possibility that the current speculative mania may continue to spread, pushing the price of Bitcoin up to the consensual region between $ 50,000 – $ 100,000, we believe that such price levels would prove unsustainable.”
The price of Bitcoin rose to almost $ 35,000 on Sunday, surprising most analysts who were expecting a cap near the $ 30,000 psychological barrier. Coming as an echo for JPMorgan’s warnings, the price of Bitcoin fell immediately by 17% compared to the maximum reached. But the episode of volatility did not scare investors, who without hesitation bought Bitcoin coins at a price below $ 30,000.
Enthusiasm for investing in cryptocurrencies is beginning to take hold in the field of so-called alt-coins. Take Ethereum as an example, whose value increased over the weekend from $ 770 to $ 1180, bringing fabulous gains to investors who bought in the first part of 2020, at prices around $ 200. Remarkably, the price of Ethereum remains above the psychological threshold of $ 1000, fueling expectations for a new rally.
JPMorgan perceives Bitcoin as a “alternative” preferred by millennial investors looking for “digital gold”.
With a market value of $ 575 billion, the price of Bitcoin should rise to $ 146,000 to match the total investment in gold made by the private sector through funds traded on the stock exchange or bullion and bullion.
“It is therefore unrealistic to expect the allocations to Bitcoin made by institutional investors to match those of gold without a convergence of volatilities. A convergence of volatilities between Bitcoin and gold is unlikely to happen quickly and is a multi-year process in our minds, ”JPMorgan said.
Robert J. Smith is still early into his career as tech reporter but has already had his work published in many major publications including JoyStiq and Android Authority. In regards to academics, Robert earned a degree in business from Fordham University. Robert has passion for emerging technology and covers upcoming products and breakthroughs in science and tech.