Global investment firm JPMorgan reaffirmed its forecast of bitcoin reaching the $146,000 price level as the digital currency continues to substantiate its “digital gold” moniker.
The leading cryptocurrency reached an all-time high in the month of October, pushing past $60,000. JPMorgan’s forecast comes with the notion that institutional investors will prefer bitcoin over gold.
“JPMorgan recently published a deep dive into digital assets and it makes for happy reading for crypto fans – albeit with a few caveats,” a Business Insider article says. “The US’s biggest bank has renewed its prediction that bitcoin could surge to $146,000 in the long term, if volatility subsides and institutions start preferring it to gold in their portfolios.”
JPMorgan’s prediction comes at a time when inflation fears, in the U.S. as well as the rest of the globe, are swirling within the capital markets while the demand for gold has been lukewarm amid an economy that’s still in recovery mode. The U.S. Federal Reserve noted that the economy is heating up and rate increases will finally come as it tapers off its stimulus measures, such as bond buying.
Meanwhile, markets have been fretting over inflation with arising talks of stagflation — an economic environment marked by low growth, high inflation, and rising rates. That said, JPMorgan notes that the time is right for an inflation hedge that could unseat gold.
“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,” added Panigirtzoglou.
Investing in the Future(s) of Bitcoin
The approval by the Securities and Exchange Commission (SEC) of a ProShares bitcoin futures product in the U.S. is sure to open the floodgates for more innovative offerings. This could include the offering of funds that track bitcoin’s spot price or funds that cater to other alternative coins, such as ether.
Meanwhile, the aforementioned ProShares Bitcoin Strategy ETF (BITO) can give investors access to bullish bitcoin prices. BITO is the first U.S. bitcoin-linked ETF that offers investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid, and transparent way by seeking capital appreciation primarily through managed exposure to bitcoin futures contracts.
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