Analysts at major investment bank JPMorgan Chase have predicted that it will be difficult for bitcoin to match Gold’s current investor allocation of $3.3 trillion. The JP Morgan Bitcoin opinion coincides with the recent achievement of a new All-Time High (ATH) for the premier digital asset, reaching $69.9k.
The prediction was made in a recent report penned by senior analyst Nikolaos Panigirtzoglou, as the bank tried to provide “realistic insights” into the bitcoin investment scene.
Why Bitcoin Can’t Inspire the Same Confidence as Gold?
The reason given by Panigirtzoglou for this unlikeliness is due to the high risks and volatility associated with bitcoin. This is one of the go-to reasons given by conventional banking outlets when it comes to investing in the digital asset.
According to this analysis, bitcoin’s volatility is 3.7 times higher than that of Gold’s. This makes it a much more risk-prone asset and therefore, investors aren’t likely to invest such notional amounts into it.
The report even predicted that the Bitcoin Exchange-Traded Funds (ETFs) will eventually hold only $67 billion over time. This is despite these 9 ETFs raising a massive $19 billion in the first two months after their launch. They aren’t slowing down a lot as BTC’s value continues to post new highs.
JP Morgan Bitcoin History
JP Morgan Chase has been giving mixed signals regarding bitcoin for the last couple of years. The bank has historically opposed the premier digital currency openly despite it being a partner of a bitcoin ETF.
In the same Panigirtzoglou report, it is argued that if the top digital asset’s volatility is adjusted with Gold’s, the former is already more popular among investors. In a volume-adjusted scenario, bitcoin already has a larger allocation of investor portfolios.
The bank’s chief strategist Marko Kolanovic stated that bitcoin and other digital assets’ popularity could make it difficult for the Federal Reserve to achieve a soft landing. This means that The Fed will have to delay any rate cuts and that could in turn, keep the economy under pressure.
CEO Jamie Dimon’s Comments
Current CEO Jamie Dimon has been one of the most well-known critics of bitcoin. In January 2024’s World Economic Forum in Davos, Switzerland, Dimon said that the digital currency “did nothing” and alleged that it was used only for money laundering, fraud, tax evasion and even sex trafficking. He even once called bitcoin a fraud worse than tulip and that it was a “pet rock”.
He tried to end his speech on a lighter note by saying that this was the last time he was going to talk about the digital asset on CNBC. He also said that he was open to the idea of digital currencies, provided they were sufficiently regulated.
Will Bitcoin Match Gold’s $3.3 Trillion Allocation?
JP Morgan Chase’s own comments regarding bitcoin achieving this major milestone appear self-contradictory at times. The bank has acknowledged that according to one metric, the digital currency has already surpassed gold.
But, at the same time, the bank’s report concludes that bitcoin won’t surpass the $3.3 trillion market currently set by Gold. If the coin does achieve this market cap, the price of 1 BTC will have soared above $171,000. It remains to be seen if the top digital currency can prove JP Morgan Chase wrong once again.
