Golds Signal for Bitcoin: $45K Value

Golds Signal for Bitcoin: $45K Value

JPMorgan strategists suggest that Bitcoin should be trading significantly higher than its current price level, around $45,000, assuming investors view it as a store of value like gold, but regulatory crackdown and banking network unsettling are likely to constrain any potential upside in the short term.

As the digital revolution persists to reshape the financial landscape, Bitcoin (BTC) has resurfaced as a formidable contender to challenge the age-old dominance of gold as a store of value and hedge against inflation.

This being stated, strategists at JPMorgan said gold’s price implies that Bitcoin (BTC) should be trading substantially higher than its current price level, assuming that numerous investors see the two assets as interchangeable. 

Reports by the analysts, given the bullion’s current price of just below $2,000 an ounce, the world’s leading digital currency should be trading somewhere around $45,000, they wrote in a note to clients on Wednesday, May 24. Bitcoin (BTC) as of now trades at $26,512, nearly 70 percent lower than the level strategists say it should be. 

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Nonetheless, the premise that both serve as stores of value can potentially fail to convince some, given that Bitcoin (BTC) has been around for only 14 years, while gold has been playing that role for centuries.

For that reason, the bulk of institutional investors have stuck with gold as their go-to safe-haven investment, while Bitcoin (BTC) has been more appealing to retail investors. 

Bitcoin (BTC) halving could likewise propel Bitcoin price

JPMorgan strategists likewise reflected on another factor that could potentially drive BTC’s price in the future – the halving event. 

Bitcoin (BTC) halving refers to a programmed event that occurs approximately every four years, reducing the price at which new Bitcoins are created by half, leading to a decreased supply of new coins entering the market and potentially impacting its value. The number of crypto tokens miners receive for processing transactions and keeping the blockchain tech secure likewise gets halved. 

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The following halving event, which is expected to take place next April or May, would double the expense of mining 1 Bitcoin to around $40,000. 

In the meantime, the bank’s strategists were not positive  tendency on BTC’s price in the short term, citing the ongoing regulatory backlash against digital assets. 

“The headwinds from the United States regulatory crackdown, the unsettling of banking networks for the cryptocurrency ecological system and the reverberations from last year’s FTX Trading Ltd collapse are likely to constrain any potential upside.”

– the analysts wrote.

Bitcoin (BTC) price analysis

At the time of publication, BTC’s price stood at $26,514, up around 1 percent in the past 24 hours. In the previous 30 days, the digital currency dropped 6.6%.

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On the other hand, its year-to-date profits remain strong, at 60%, marking a whole lot of recovery following the 2022 price crash.

Disclaimer: The content on this site should not be considered financing advice. Investing is speculative. And once investing, your financial resources is at risk.

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