As Bitcoin entered into 2021 with an extremely bullish outlook, predictions from different crypto analysts are coming constantly. JPMorgan, a global financial services firm, has said that Bitcoin has surged by 300% in 2020 and this might repeat in 2021 as well. However, it is also claimed that this kind of higher move will be quite unsustainable. As per the note:
“While we cannot exclude the possibility that the current speculative mania will propagate further, pushing the bitcoin price up towards the consensus region of between $50k – $100k, we believe that such price levels would prove unsustainable.”
JPMorgan Says Bitcoin Competing With Gold as Alternative Currency
According to JPMorgan, Bitcoin is still competing with gold to be an alternative currency. It has been seen that a lot of people have named Bitcoin as Digital Gold, and in the wake of the COVID-19 pandemic, people across the world have preferred to adopt digital methods rather than using the traditional ones.
The current market cap of Bitcoin is $575 billion, which is quite less than the market cap of gold. In order to compete with gold, the Bitcoin price will have to reach $146,000. However, people have started seeing Bitcoin as a safe haven and believe it to be as valuable as gold. The major reason behind this is that institutional investors have started adopting Bitcoin, and they do not seem to get bothered with the high volatility of crypto.
Convergence in Bitcoin and Gold Volatility Is Multi-Year Process
JPMorgan has claimed that despite the huge interest of institutional investors in Bitcoin, the convergence in Bitcoin and gold volatility is still way ahead. As bullish predictions for Bitcoin are coming constantly, the crypto community is hoping to see the best performance of Bitcoin in 2021. However, nothing could be said before because of the highly volatile nature of Bitcoin.