Financial behemoth JP Morgan is lowering its Bitcoin price prediction while the flagship cryptocurrency trades sideways under the $60,000 level.
According to a report from Business Insider, the banking giant adjusted its upside target for BTC from $146,000 to $130,000, citing the dip in gold.
“The decline in the gold price since [the initial estimate] has mechanically reduced the estimated upside potential for Bitcoin as a digital alternative to traditional gold, assuming an equalization with the portfolio weight of gold… Mechanically, the Bitcoin price would have to rise [to] $130,000 to match the total private sector investment in gold.”
The yellow metal is currently trading at $1,729, in a downtrend since August when it peaked above the $2,000 level. According to JP Morgan, Bitcoin could eventually adopt the same level of volatility as gold over the long term, which will make it more attractive to institutional investors.
“A convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is likely a multi-year process. This implies that the above $130,000 theoretical Bitcoin price target should be considered as a long-term target.”
When analysts from the bank previously named $146,000 BTC as the level they were targeting, they reasoned that “[a] crowding out of gold as an ‘alternative’ currency implies big upside for Bitcoin over the long term.”
At the time of writing, Bitcoin is currently trading at $57,686, according to CoinGecko.Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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