The leading multinational investment bank in the US believes Bitcoin price can soar to $650,000
The investment bank compiled its last Flows and Liquidity report for 2020 highlighting that gold and Bitcoin gained the most from the coronavirus pandemic.
Bitcoin has posted an impressive performance in the third and the current fourth quarter this year. The crypto’s tremendous rally at the end of November, in particular, saw it reach its previous all-time high, but that wasn’t the end of it. Last week Bitcoin’s price climbed up to $22,600 and over the weekend, it surged to an unprecedented level of $24,000 on some major exchanges.
During this period, the crypto’s adoption rate has risen exponentially and JP Morgan describes this Bitcoin growth as remarkable. The crypto has drawn the attention of several individual and institutional investors globally. Many companies have now started showing interest in the digital asset by setting aside their funds to acquire Bitcoin.
However, the digital asset still has a long way to go in terms of market capital. Most of the leading traditional assets have a market cap in the range of trillions e.g. gold that is valued at roughly $10 trillion. Bitcoin, by contrast, has a current market cap of $442 billion. That said, its growth rate remains a positive attribute especially when analysing its potential. The digital asset grew by $300 billion in market validation in 2020 alone.
“Alternative ‘currencies’ such as Gold and Bitcoin have been the main beneficiaries of the pandemic in relative terms growing their assets (for investment purposes) by 27% and 227%, respectively,” a section of the JPMorgan report read.
The investment bank reckons that if Bitcoin stays the course and draws more investors, it could reach a price level of $650,000. JP Morgan fancies this being the case if the crypto attains the same market cap as gold. Of course, this won’t happen in the near future. In the report, JP Morgan asserts that by virtue of increased institutional adoption of Bitcoin, the price jump will likely happen sooner than it had been expected.
The bank recently suggested that many institutions will follow the likes of MassMutual and MicroStrategy in getting exposure to Bitcoin. JP Morgan predicted a resulting inflow of $600 billion into Bitcoin. More companies investing in Bitcoin will be key in driving Bitcoin prices higher.