“The reason is that, for most institutional investors, the volatility of each class matters in terms of portfolio risk management, and the higher the volatility of an asset class, the higher the risk capital consumed by this asset class.” He added.
Furthermore, the interest of financial institutions in Bitcoin is what’s making the 2020 rally different than that of 2017 when the cryptocurrency lost its value and dropped to $3,122 the following year.
According to JPMorgan, there is “little doubt that the institutional flow impulse into bitcoin is what distinguishes 2020 from 2017.”
“A convergence in volatilities between bitcoin and gold is unlikely to happen quickly and is in our mind a multi-year process. This implies that the above $146k theoretical bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.”
Finally, there are still some arguments and counter-arguments by billionaires regarding the Bitcoin rally. Billionaire Warren Buffet thinks that Bitcoin has no value at all and investors should not invest in it.
