Bitcoin and cryptocurrency have swept Wall Street this year, with several major banks starting to roll out crypto services.
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The price of bitcoin has surged from around $15,000 per bitcoin this time last year to more than $60,000 today — causing “resilient shocks” that analysts believe have grown stronger over the past month.
Now, banking giant JP Morgan
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JPMorgan analysts led by Nikolaos Panigerzoglu wrote in a note to clients that he sees interested in trade. “Digital assets are in a multi-year structural ascent, but the current entry point seems unattractive.”
Many observers of the bitcoin and crypto market have predicted that the price of bitcoin will reach $100,000 before the end of 2021, in part due to inflation fears driving investors into so-called safe haven assets.
Concerns that inflation – which is at a 13-year high in the US – may be more stable than temporary inflation this week, prompted the Federal Reserve to begin winding down its massive program of quantitative easing caused by the pandemic.
“Digital assets have emerged as the clear winner after the pandemic, with retail investors joining institutional investors such as family offices, hedge funds, and real money asset managers including insurance companies in spreading the asset class,” JPMorgan analysts wrote.
The bitcoin price has added over 300% in the past 12 months, helping the common cryptocurrency market add nearly $2 trillion to its total value.
“The resurgence of inflation fears among investors during September/October 2021 appears to have renewed interest in using bitcoin as an inflation hedge,” wrote JPMorgan strategists. “Bitcoin’s appeal as an inflation hedge may be reinforced by the failure of gold in recent weeks to respond to rising inflation concerns.”
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Bank researchers believe that if bitcoin’s volatility continues to drop, a price of $73,000 in 2022 is reasonable, but its wild volatility means an increase of more than double its current price of $61,000 or even a drop below $30,000 is also possible.
However, interest in bitcoin as an inflation hedge alternative to gold, even if to a small degree, could lead to a “Bitcoin rally.”
“Given the scale of financial investment in gold, any crowding out of gold as an ‘alt’ currency would mean a massive rally for bitcoin in the long run,” Banjerzoglu wrote, echoing his previous long-term bitcoin price prediction of $146,000 per bitcoin. .