If bitcoin starts to resemble gold’s price performance and investment structure, its price could skyrocket to $45,000, according to a note by JPMorgan analysts.
However, the multinational investment bank believes there will be a big hit.
Bitcoin’s year-to-date performance has been quite impressive, as the asset enters 2023 at just under $17,000 after a tumultuous 2022. However, it broke through that level in the first few weeks of the new year and skyrocketed above $30,000 in the following months.
Despite the subsequent retracement to current levels around $28,000, BTC is still trading 60% higher than it was in early 2023.
JPMorgan analysts believe that the cryptocurrency could soon increase by 75%. To do so, however, bitcoin needs to be accepted as an investment instrument similar to gold, something many views have argued over the past few years.
Analysts said:
Investors are currently holding gold for investment purposes outside of central banks with an amount of about $3 trillion, which, compared to Bitcoin, would cost $45,000. This forecast is based on the assumption that the value of Bitcoin will be comparable to the value of gold in private investors’ portfolios, in terms of risk capital or volume.
The precious metal has also gained since the start of the year, albeit at a more modest rate. It entered 2023 at around $1,830 an ounce and spiked above $2,000 in early May. However, it has dropped to $1,950 an ounce since then, meaning it’s up about 6.2% year-to-date.
JPM strategists also outlined the upcoming halving in 2024, which could be another factor driving the BTC price spike.
Historically, Bitcoin’s cost of production served as the effective minimum. Past halving events in 2016 and 2020 triggered an increase in the bitcoin price, gaining momentum after the halving.