Strategists at financial services giant JPMorgan are raising doubts that the price of Bitcoin (BTC) could hit six figures over the coming months, according to a Bloomberg report.
The report says that the current consensus predicting Bitcoin will reach at least $100,000 in 2022 can only come true if BTC’s volatility were to fall significantly.
“This challenges the idea that a price target of $100k or above, which appears to be the current consensus for 2022, is a sustainable Bitcoin target in the absence of a significant decline in Bitcoin volatility. Digital assets are on a multiyear structural ascent, but the current entry point looks unattractive.”
JPMorgan says that the fair value of Bitcoin should be around $35,000. Bitcoin is currently trading at $63,000, according to CoinGecko.
The financial services giant also says that Bitcoin’s volatility is four times that of gold, but if BTC’s volatility were to reduce by half then $73,000 would be a “reasonable” price target.
For the wider digital assets class, JPMorgan strategists are forecasting that they will appreciate by 15% next year, beating hedge fund and real estate returns. However, the wild swings that digital assets experience lowers their appeal, according to the strategists.
After Bitcoin hit a new all-time high in late October, JPMorgan said BTC’s rise was due to concerns over inflation.
“…we believe the perception of Bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into Bitcoin funds since September.”
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