Bitcoin price rallies of over US $ 30,000 per coin shocked Wall Street. Now one of the largest US investment banks predicts the price of Bitcoin to break US $ 146,000.
This is a long-term Bitcoin price prediction from JP Morgan. The reason, Bitcoin competes with gold as an “alternative” currency, as reported by CNBC International, Wednesday (6/1/2021).
However, to achieve the target price, there are several things to do. Namely, Bitcoin’s market cap – which is calculated by multiplying the price by the number of coins in circulation – must be US $ 2.7 trillion. This means that it must increase 4.6 times from now which reached more than US $ 575 billion.
Bitcoin’s Price Volatility Needs to Decrease
In order for bitcoin’s market capitalization to reach that level. Thus, its price volatility needs to fall substantially to give institutional investors who are betting big on Bitcoin confidence.
Bitcoin is known for its wild volatility. As of Tuesday, Bitcoin price was up 1% in 24 hours, trading at around US $ 31,720, according to data from crypto market data provider Coin Metrics.
“This long term advantage is based on equating the market capitalization of bitcoin with gold. For investment purposes depending on the volatility of bitcoin that is attached to gold in the long term,” wrote strategist JPMorgan.
“The reason is, for most institutional investors. The volatility of each asset is important in terms of portfolio risk management. And also the higher the volatility of the asset class, the higher the risk of capital consumed by this asset class.”
Crypto bulls say that the recent bitcoin rally is very different from the late 2017 bubble where Bitcoin was close to US $ 20,000 per coin, then the following year it crashed to US $ 3,122 per coin.