• JP Morgan strategists set a long-term price of $100,000 per Bitcoin (BTC) in a note published on Monday.
  • The target replicates the 2020 bullish run that set Bitcoin above $34,000 at the start of this year.
  • This price increase, however, will be unsustainable, the note states.

Following a 342% spike in price over the course of 2020, JP Morgan strategists led by Nikolaos Panigirtzoglou believe the bullish momentum on Bitcoin could set it to $100,000 in the long term. With the younger generation increasingly focusing on the ‘digital gold’ as opposed to physical gold, BTC has the potential to match the total private sector investment in gold via exchange-traded funds or bars and coins.

Bitcoin’s current market capitalization will need to grow past $2.5 trillion – or a theoretical price of $146,000 – to match gold’s in the private sector. A quadrupling in price could see the top crypto match gold’s private investment, but the authors deem such an increase “unsustainable.” The note reads,

"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."

Big financial players and institutional investment is the key to such a bullish run on price, the note explains. However, to entice these institutional players to buy and invest in Bitcoin, the coin’s market will need to establish similar volatility with gold as institutions still fear the wild volatility experienced across crypto markets. This convergence in gold and BTC’s volatilities, however, is not a short term process as stated,

“A convergence in volatilities between bitcoin and gold is unlikely to happen quickly and is in our mind a multi-year process.”

Despite the potential to match gold’s private investment market cap, Goldman Sachs recently released a report stating the rising popularity of Bitcoin is still far from threatening the existence of gold as a last resort status.