The ongoing market pullback hasn’t deterred analysts from JPMorgan, who still expect Bitcoin (BTC) to reach a record price of $170,000 within the next six to 12 months, based on the premier crypto’s historical valuation relative to gold.
JPMorgan Sees BTC Hitting $170K
In a Wednesday report, JPMorgan strategist Nikolaos Panigirtzoglou and his team noted that the cryptocurrency market has seen a roughly 20% correction since reaching its recent record highs, with the sharpest pullback taking place on October 10, which resulted in record liquidations. This was followed by the Nov. 3 downturn as investor confidence was further shaken after the $120 million Balancer exploit.
Despite these selloffs, JPMorgan believes that the deleveraging phase in crypto derivatives, particularly Bitcoin perpetual futures, is largely over.
“The message from recent stabilization is that deleveraging in perpetual futures is likely behind us,” the analysts wrote.
The bank’s price projection is based on its observation that the recent surge in gold volatility has made BTC more attractive to investors on a risk-adjusted basis. Bitcoin has long been touted as “digital gold,” but JPMorgan’s framework suggests it’s currently trading well below where it should be when adjusted for risk.
The analysts concluded that Bitcoin currently consumes approximately 1.8 times more risk capital than gold, and given BTC’s current market cap of around $2 trillion, the world’s first and largest cryptocurrency would need to rocket by roughly 67% — “implying a theoritical Bitcoin price of close to $170,000” — to match the $6.2 trillion in private investment in gold through ETFs, bars and coins.
Bitcoin is currently trading at around $101,600, meaning that its around $68,000 below JPMorgan’s gold-based volatility-adjusted fair value benchmark, the bank stated, adding that this “mechanical exercise thus implies significant upside for Bitcoin over the next 6-12 months.”
Source: https://zycrypto.com/why-jpmorgan-is-saying-bitcoin-could-hit-170000-within-the-next-6-to-12-months/
