JPMorgan's Crystal Ball: Is Bitcoin Set To Skyrocket To $45,000?

Zinger Key Points
  • JPMorgan analysts predict a potential Bitcoin price of $45,000, drawing parallels with the current surge in gold prices.
  • Despite the optimistic outlook, the bank remains cautious, citing potential hurdles such as regulatory crackdowns.

Financial analysts at JPMorgan JPM have drawn parallels between the value trends of gold and Bitcoin BTC/USD, projecting a potential Bitcoin price of $45,000 given the recent surge of gold prices past the $2,000 per ounce mark.

They argue that both assets are perceived as investment alternatives and usually share a synchronized movement.

"Investors are currently holding gold for investment purposes outside of central banks to the tune of around $3 trillion, which, if paralleled with Bitcoin, presents a $45,000 price. This projection is based on the assumption that Bitcoin's value will match that of gold in private investors' portfolios, in terms of risk capital or volume," The Block quoted a note from the team led by Nikolaos Panigirtzoglou at JPMorgan as saying.

The analysts envision the $45,000 Bitcoin price as a ceiling, suggesting a constrained growth potential for the cryptocurrency, except for the increase linked to the doubling of its mining or production costs.

They further mention that the upcoming Bitcoin halving in 2024, an event that reduces the reward for mining new bitcoins by half, could push Bitcoin's production cost to roughly $40,000.

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"Historically, Bitcoin's production cost has acted as an effective minimum limit. Past halving events in 2016 and 2020 triggered an uptick in bitcoin prices that gathered momentum post the halving event," JPMorgan's strategists explained.

In anticipation of the halving event in 2024, JPMorgan forecasts a 25% Bitcoin return over the following year.

On the subject of Ether ETH/USD, JPMorgan predicts continued selling pressure in the short term, possibly extending beyond the mid-year mark following the Shanghai upgrade.

The bank foresees Ethereum slightly lagging behind Bitcoin during this period.

Despite these predictions, JPMorgan remains guarded regarding digital assets.

They believe that factors such as the U.S. regulatory crackdown, disruptions in crypto banking networks, and the fallout from the collapse of the FTX FTT/USD crypto exchange could hinder potential gains.

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