With the increased institutional adoption of Bitcoin due to worldwide economic and social factors, the leading cryptocurrency can no longer be ignored. According to JPMorgan analysts via Bloomberg, gold may continue to lose market share:
“Bitcoin may have the potential for substantial further gains over the long term as it competes with gold for investment flows, according to JPMorgan Chase & Co.”
As investors begin to see Bitcoin as a better store of value, transaction system, and hedge against inflation compared to gold, large-scale purchases may continue.
The analysts speculate that bitcoin still has some serious upside potential:
“A crowding out of gold as an ‘alternative’ currency implies big upside for Bitcoin over the long term, […] a convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is in our mind a multiyear process. This implies that the above-$146,000 theoretical Bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.”
Although the analysts do not predict a quick price run-up to near $150,000, they believe a gradual increase of cash outflows from gold and other assets will inevitably find its way to BTC.
JPMorgan Not the Only One Calling the Shots
To some users, this may seem like a bold prediction. The firm is one of the largest financial institutions globally and not the first big player to think this way.
In a recent interview with YouTuber Casey Adams, Tyler Winklevoss, Bitcoin billionaire and cofounder of the Gemini exchange, predicted a $500,000 bitcoin price for similar reasons.
Winklevoss explains that bitcoin is a fundamentally stronger store of value and hedge against inflation than gold. And since gold has a $9 trillion market cap, bitcoin will likely overtake it one day.
Winklevoss continues that if bitcoin established itself as a mainstream transfer of value and not just a store of value, it could be worth even more as it competes against the global fiat market.
These are bold long-term predictions, but they don’t seem implausible, at least according to JPMorgan.
If institutions continue to choose bitcoin over gold, the proof-of-work coin could ultimately creep towards the long-term predictions given.