“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.