Although the plan to split bitcoin (BTC) has sparked excitement and controversy in the crypto community, Wall Street is playing the opposite role, as JPMorgan Chase & Co. (NYSE:JPM) analysts claim the original digital currency’s price is going to be as high as $35,000.
It’s been a bad week for Bitcoin. The cryptocurrency is down almost 50 percent from its highs, and on Wednesday, JPMorgan Chase & Co. said its true value is $35,000 a coin (it’s currently trading closer to $8,000). But it’s not just the price that’s falling. The cryptocurrency’s share of the overall market for digital currencies has been falling, too.
JP Morgan Chase & Co. (JPM) CEO Jamie Dimon is doubling down on his criticism of Bitcoin, and his projection of its future value keeps going up and up. In a new interview on Fox Business Network, Dimon said he’s sticking by his September prediction that Bitcoin will ultimately be worth $100,000—and then some. Dimon has consistently been one of the cryptocurrency’s most vocal critics, calling it “a fraud” in September and predicting it was going to “blow up.”. Read more about bitcoin price prediction and let us know what you think.Institutional investors are trading bitcoin for gold for the first time in six months, according to analysts at JPMorgan. The move came after cryptocurrencies, including bitcoin, fell sharply to lows just above $30,000. Earlier this year, analysts at JPMorgan raised their price target for bitcoin to $130,000. According to Business Insider, bitcoin needs to reach this target price to match the private sector’s total investment in gold. However, the investment bank warned that convergence of bitcoin and gold volatility is unlikely to happen soon and will be a multi-year process, making a price of $130,000 a long-term goal. JPMorgan has since taken steps to support bitcoin and helped its institutional investors access the crypto currency. According to CNBC, CEO Jamie Dimon said customers are interested and I don’t tell customers what to do, and that JPMorgan will help them buy bitcoin if customers want it. Dimon, who once called bitcoin a scam and later said he regretted that before he approved of JPMorgan helping customers buy bitcoin, said he was not a supporter of bitcoin. Still, the support of the world’s largest bank in terms of market capitalization would be valuable for bitcoin.
JPMorgan says institutional investors are shifting from bitcoin to gold
Many bitcoin proponents have long claimed that bitcoin is digital gold. However, institutional investors are swapping digital gold for traditional gold, according to a study by JPMorgan. This is at a time when bitcoin has fallen to levels almost twice the peak price. After peaking at over $60,000, bitcoin is still below $40,000 after a slight rebound. Bitcoin futures markets also experienced a large sell-off, while inflows into gold ETFs increased. As a result, the current fair price of bitcoin would be $35,000, according to JPMorgan, based on the volatility ratio between bitcoin and gold.
Inflation-linked investments may lead to bitcoin growth
Rising inflation has led many institutional investors to seek safer investments. Bitcoin is often described as a hedge against the US dollar, while gold is a traditional asset for those who want to avoid US dollar inflation. Although institutional investors currently seem to prefer the latter, bitcoin could benefit from younger investors preferring bitcoin to gold. Unless U.S. dollar inflation declines, bitcoin could quickly become the asset of choice for young investors looking to avoid a drop in the value of the currency.
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Bitcoin is in the midst of a price correction that has seen its value plummet from December’s high of $19,000. While JPMorgan’s CEO Jamie Dimon recently said that bitcoin was a “fraud” that would “blow up,” the bank’s 2018 outlook notes that the currency will likely recover and grow to around $4,000-$5,000 over the course of the year. The bank’s contract-for-difference analyst Nikolaos Panigirtzoglou told clients that bitcoin’s current price of $6,500 is “still significantly overvalued.” He added: “The current direction of travel is clearly unsustainable, and a much larger drop is likely in the months ahead.”. Read more about bitcoin news and let us know what you think.
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