JPMorgan has renewed its prediction that Bitcoin could reach the $146,000 mark in the long term. The biggest bank in the United States published a detailed paper about the largest cryptocurrency by market value.

JPMorgan argued that Bitcoin could reach the milestone if the market’s volatility subsides. Additionally, the bank said that if Bitcoin gets wider adoption by institutions on the behalf of gold; then it would surge by 130% above Wednesday’s price of $63,160.

How can bitcoin reach $146,000

Nikolaos Panigirtzoglou added that Bitcoin is a scarce product that is increasingly competing with gold for the attention of investors. The cryptocurrency is considered a hedge against inflation. In other words, JPMorgan analysts believe that Bitcoin could surge in price even when inflation causes other assets to plummet.

"The re-emergence of inflation concerns among investors during September/October 2021 appears to have renewed interest in the usage of bitcoin as an inflation hedge," JPMorgan strategist Nikolaos Panigirtzoglou said.

"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," he said. Inflation is running at a 13-year high in the US and has surged around the world.

"Considering how big the financial investment into gold is, any such crowding out of gold as an 'alternative' currency implies big upside for bitcoin over the long term," he said, suggesting a long-term price target of $146,000.

Nonetheless, JPMorgan said that to reach $146,000, Bitcoin’s high volatility should decrease sharply so that more investors are comfortable adding it to their portfolios.

For now, Bitcoin is four to five times more volatile than gold, the bank added. The figure should decrease by a lot more before institutions dive deep into Bitcoin investment.

Either way, JPMorgan's global markets strategists appear bullish about crypto. "There is little doubt that cryptocurrencies and digital assets more broadly are an emerging asset class and thus on a multi-year structural uptrend," they said.

"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." They added.