On a recent note, JP Morgan strategists stand out The contrasting performance of Bitcoin and gold, suggesting that, despite the current low price of Bitcoin, it could be soon for a high trajectory.
While some investors view Bitcoin and gold as exchangeable in terms of being stores of value and hedges against inflation, the actual performance of the cryptocurrency in these areas has been unsatisfactory.
Lately, although some investors from Varejo have bought bitcoin, most of the two institutional investors have remained in gold.
Even taking into account this preference, the current price of gold, just under US$2,000 per hour, implies a price for Bitcoin of US$45,000, significantly higher than its current level of around US$26,200, assuming that The investors harass you as you exchange.
That said, JPMorgan strategists said that the price of gold suggests that Bitcoin should be trading substantially higher than its current price level, assuming that many investors see both assets as exchangeable.
Bitcoin as a store of value
It is important to highlight that Bitcoin has only been used as a store of value for 14 years, whereas our gold has been used for thousands of years, making this premiss somewhat uncertain.
Another factor that can support the rise in the price of Bitcoin is the so-called “halving” that cryptocurrency will probably pass in April or next May. Bitcoin “miners” receive bitcoins to process transactions and protect the network, but the amount of cryptocurrency they receive is reduced by about every four years.
Likewise, the halving will double the cost of mining a Bitcoin for about US$ 40,000. Not in the past, the cost of production has acted as a lower bound for two bitcoin prices, analysts will say.
No entanto, this does not mean that the strategists of the bank are still enthusiastic about the digital assets. In no time, Bitcoin and other cryptocurrencies are facing a serious regulatory backlash that is making it difficult for institutions to maintain these assets and stop the growth of the crypto industry.
The collapse of the FTX trading platform marked a turning point in a 12-month period in which Bitcoin prices fell more than halfway, and most of the two investors who got involved with cryptocurrencies over the last two years are suffering losses.
“The regulatory challenges in the United States, the instability of the banking networks for the crypto ecosystem and the consequences of the collapse of FTX not last year will likely limit any potential uptake”we write analysts.