Theย present gold price of nearly $2,000 per ounce would imply a Bitcoinย (BTC) price of $45,000, reportsย by JPMorgan analysts, as the two assets tend to move in tandem and are seen as alternatives by investors.
โWith the gold price growing over $2,000, the value of gold held for financing objectives outside central banks is asย ofย now valued at around [$3 trillion]. Asย aย result, thisย means a $45,000 price for Bitcoinย (BTC) under the assumption that Bitcoinย (BTC) equalizes gold in private investorsโ portfolios in danger financialย resources or [volume]-adjusted terms,โ JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note on Wednesday.
JPMorgan considers the $45,000 Bitcoinย (BTC) price as an upper limit, indicating limited potential for the investment beyond the increase driven by the doubling of mining or production costs. The next Bitcoinย (BTC) halving in April or May 2024 would mechanically double Bitcoinโs production cost to around $40,000, reportsย by JPMorgan. โThis is because bitcoinโs production cost has historically acted as an effective lower bound,โ JPMorgan strategists stated. โ Nonetheless, the previous halving events of 2016 and 2020 were accompanied by a positiveย tendency trajectory for Bitcoinย (BTC) prices that had accelerated post the halving event.โ
The Bitcoinย (BTC) halving is an event that occurs approximately every four years, reducing the reward for mining new Bitcoinย (BTC) blocks by half, effectively decreasing the price at which new bitcoins are created, toย beย ableย to control inflation and maintain the scarcity of Bitcoinย (BTC) over time. The next Bitcoinย (BTC) halving will see the block reward halve from 6.25 Bitcoinย (BTC) to 3.125 bitcoin.
JPMorgan assumes a 25 percent return on Bitcoinย (BTC) over theย following 12 months, as this timeframe captures the halving event expected next year.
JPMorgan on ETH
Ether (ETH) may continue to face some selling pressure in the near term beyond the Shanghai upgrade till mid-year or so, reportsย by JPMorgan. โWe thus expect Ethereumย (ETH) to somewhat underperform Bitcoinย (BTC) over the near term,โ the bank said.
Inย general, JPMorgan retains its cautious stance on digital assets as headwinds from the Unitedย States regulatory crackdown, disruptions to cryptocurrency banking networks and the ongoing repercussions from the FTXย Tradingย Ltd exchange collapse are likely toย delimit any potential gains.
Bitcoinย (BTC) is asย ofย now currentlyย worth around $26,500 and ether at about $1,800, reportsย by The Blockโs Data Dashboard.
