Could 1 Bitcoin Eventually Be Valued Over $100,000?
The world’s No. 1 digital asset was recently trading over $35,000, but the team at JPMorgan Chase argue that the cryptocurrency could be valued at $146,000 in realatively near future. Demand has skyrocketed and the blazing growth has drawn Wall Street's eyes away from gold (the traditional hedge against inflation and devaluing of the dollar).
When the analysts look at the data there seems to be an outflow from gold ETFs and an inflow to digital-currency focused trusts.
“Bitcoin’s competition with gold has already started in our mind as evidenced by the more than $3 [billion] of inflows into the Grayscale Bitcoin Trust and the more than $7bln of outflows from Gold ETFs since mid-October,”VIA JPMORGAN
“There is little doubt that this competition with gold as an ‘alternative’ currency will continue over the coming years given that millennials will become over time a more important component of investors’ universe and given their preference for ‘digital gold’ over traditional gold,” according to the research team.
“But this long term upside based on an equalization of the market cap of bitcoin to that of gold for investment purposes is conditional on the volatility of bitcoin converging to that of gold over the long term,” the researchers write.
PayPal recently allowed users to purchase bitcoins, Ethereum’s Ether coins, Bitcoin Cash and Litecoin (Cash App Square also lets users buy and sell bitcoins) making these digital currencies much more accessible.
Bitcoins are up 12% so far in 2021, compared against a 3% gain for gold’s price. Additionally, The Dow Jones Industrial Average and the S&P 500 index and the Nasdaq Composite are all lower at this point in the year.