Cryptocurrencies

JP Morgan sees Bitcoin (BTC) at $ 130,000 – Cryptocurrencies

JP Morgan finished returning his jacket last Friday. The New York bank is full of praise for Bitcoin. Analyst Nikolaos Panigirtzoglou says in a note on the firm’s overall strategy that Bitcoin now competes with gold. A clear contrast to the statements of the CEO of JP Morgan in 2018: “Bitcoin is a scam” …


“Bitcoin’s Competition with Gold”

JP Morgan global markets strategy October 23, 2020

According to JP Morgan, the physical gold market is worth $ 2.6 trillion. Which makes one of his analysts say:

“Mechanically, the capitalization of bitcoin should be multiplied by ten to match the total private sector investment in gold through ETFs or bars and coins. “

JP Morgan

Put another way, a Bitcoin should be worth $ 130,000… Some would argue, however, that this is an estimate in the low end. For two reasons. The first is that this calculation does not even include the gold held by central banks … Logic would rather put Bitcoin in parallel with ALL the gold out of the ground. We are at about 190,000 tonnes according to the World Gold Council. That is $ 11,670 billion at the current rate and not just $ 2,600 billion.

With this new number in mind, and in the event that all the gold in the world were to be worth as much as the 21 million Bitcoins, then the latter would be worth $ 624,000 “apiece”. Its price would therefore not be multiplied by a factor of “10”, as suggested by JP Morgan, but by a factor of “48”. Not to mention all the Bitcoins lost forever …

Bitcoin is Better

The second reason why this factor 10 is conservative is that le Bitcoin is greater than gold. Bitcoin allows instant transfers to the other side of the world for almost free. Impossible with the barbarian relic which, let’s say it, needs fiat currency to exist … Bitcoin does not have this annoying flaw. It is a currency as well as a payment system. 2 in 1.

On the other hand, how do you pay for a baguette of gold dust? How do I buy something online for gold? Problem again insoluble unless you go through fiat currency. Bitcoin does not have this problem because it has 8 decimal places. So it is possible to pay something worth as little as 0.00000001 BTC. Or $ 0.00013. Suffice to say that there is room, even in the event of hyperinflation …

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Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

It is therefore not far-fetched to expect that Bitcoin’s capitalization will eventually exceed that of gold. This means that its potential for appreciation is greater than a factor of 48.

Even a modest reallocation of capital from gold to Bitcoin, in the long run, would involve doubling or tripling the price of bitcoin“, Advances JP Morgan very cautiously.

Bitcoin, the gold of new generations

The long-term upside potential of bitcoin is considerable as it competes with gold as an ‘alternative’ currency as Millennials will over time become a larger component of the investor universe.“, Adds the Wall Street juggernaut, which sees BTC / USD touching $ 14,000 in the short term.

Cryptocurrencies have value not only because they serve as a store of value, but also because of their usefulness as a means of payment. The more economic agents accept cryptocurrencies as a means of payment, the greater their utility and value will bes “, concludes JPMorgan, who did not forget to note in its report the recent maneuvers Paypal.

Indeed, more and more companies should follow in the footsteps of Square, Paypal, Grayscale or Microstrategy by acquiring large amounts of bitcoin. The resulting decrease in supply will continue to make Bitcoin shine.

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Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

JP Morgan is very conservative in his estimates, but the fact that Jamie Dimon’s bank admits Bitcoin to be a competitor to gold speaks volumes about how far stateless, debt-free cryptocurrency has come.

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