Bitcoin has “considerable” upside in the long-term as it better competes with gold as an “alternative” currency, JPMorgan said in a note on Friday.
According to JPMorgan, the physical gold market is worth $2.6 trillion, which includes assets held within gold ETFs. For bitcoin to catch up to gold in terms of market value, the cryptocurrency would have to surge 10x from current levels.
“Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the bitcoin price. Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as means of payment. The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value,” JPMorgan explained.
“The potential long-term upside for bitcoin is considerable as it competes more intensely with gold as an ‘alternative’ currency we believe, given that Millenials would become over time a more important component of investors’ universe,” JPMorgan concluded.
The economist Alex Krüger, a cryptocurrency trader and founder of Aike Capital tweeted, “JP Morgan, from Bitcoin is a fraud and will blow up in 2017 to Bitcoin’s competition with gold in 2020”.
Back in 2017, Nikolaos Panigirtzoglou, an analyst at JPMorgan believe that Bitcoin could soon be joining gold as a reliable, long-term way to store wealth. Recent growth and recent changes have seen Bitcoin lean more towards being digital gold.
There are changes afoot in the Bitcoin market, especially when it comes to making the digital currency easier to invest in. Panigirtzoglou told Telegraph:
“The prospective launch of Bitcoin futures contracts by established exchanges, in particular, has the potential to add legitimacy and thus increase the appeal of the cryptocurrency market to both retail and institutional investors.”
Before that, Jamie Dimon, CEO of JPMorgan Chase has called it a fraud, “You can’t have a business where people can invent currencies out of thin air and think that people who are buying it are really smart. It’s worse than Tulip Bulbs; it won’t end well. It’ll eventually blow up; it’s a fraud.”
You can also check Bitcoin Price here.
Read more:
- JP Morgan Analyst Nikolaos Panigirtzoglou: The Intrinsic Value Of Bitcoin Calculated From Mining Costs
- JPMorgan: The S&P 500 Could Rally Even Higher And Bitcoin Stands To Benefit
- JPMorgan Warned The Concept Of Central Bank Digital Currencies Could Undermine The Geopolitical Power Of The U.S.