JPMorgan expects Bitcoin (BTC) to reach $ 130,000, while Ark Invest expects BTC’s market valuation to exceed that of gold.
The optimistic macro forecast of both funds revolves around Bitcoin’s scarcity, which has bolstered its popularity as a safe haven.
Why are both high-profile funds so optimistic about Bitcoin?
As before Cointelegraph reported, the dollar index outlook is declining.
Fears of inflation and increasing liquidity in the financial markets are causing reserve currencies such as the dollar to depreciate.
Ark Invest, for example, sees Bitcoin approaching nearly $ 500,000 in the future as the fund expects it to outperform gold by market cap. Currently, Bitcoin’s market capitalization is about 10% of gold.
BREAKING: Ark Invest believes #BitcoinThe market cap will one day “comfortably eclipse” that of gold and reach over $ 10 trillion
– Market Meditations (@MrktMeditations) April 5, 2021
The Winklevoss twins, who own more than a billion dollars in cryptocurrencies such as Bitcoin, outlined a similar statement in the past.
In the new popular essay entitled “The Case for $ 500K Bitcoin,” Tyler Winklevoss, Gemini’s co-founder, says, said
Today, the market cap of above ground gold is conservatively $ 9 trillion. If we’re right about using a gold framework to value bitcoin, and bitcoin continues on this path, the bullcase scenario for bitcoin is that it is undervalued by a multiple of 45. In other words, the price of bitcoin could increase 45x from where it is now, which means we can see a price of $ 500,000 per bitcoin. ”
Meanwhile, JPMorgan has set a more conservative target at $ 130,000, which is more realistic as a short-term target for Bitcoin as it would bring BTC’s valuation to around $ 2.73 trillion.
Holger Zschaepitz, a market analyst at Welt, noted
JPMorgan sets $ 130k # Bitcoin target BUT the risk-adjusted Bitcoin theoretical fair value of $ 130,000 would fall to between $ 24,000 and $ 30,000 in the long run based on current volatility ratios. Upside potential depending on Bitcoin volatility which converges to that of gold. (Via BBG) “
However, Zschaepitz noted that the long-term risk-adjusted price of Bitcoin could decline in the future, which is not accurately predictable as it is difficult to predict the trend of volatility over time.
What do traders think
According to a pseudonymous trader known as Bitcoin Jack, the SOPR indicator predicts that some profit can be taken in the short term.
The SOPR indicator measures how many BTCs are making a profit in the market and thus vulnerable to a sell-off. The trader said
“Filled in virtually all specific areas of interest on the volume profile to be ready for trend confirmation. Trend confirmation expected soon, otherwise I think we will reset to another corrective structure that will take> 1-2 weeks. ASOPR indicates little gain booked. “
Fellow cryptocurrency trader Scott Melker stressed that Bitcoin has performed well against the S&P 500 and the US stock market, making it still beneficial as a store of value.
“$ BTC vs. $ SPX. Most assets have” appreciated “because the denominator is USD, which is declining. When you look at stocks versus a deflationary asset, they look a lot less impressive.”
As long as Bitcoin continues to outperform the US stock market, from a risk standpoint, it should remain attractive to both retailers and high net worth investors in the short to medium term.