Will cyber currency become the new gold ?: Big bank sees spectacular Bitcoin price

Will cyber currency be the new gold?
Big bank sees spectacular Bitcoin course

From Jan Gänger

Bitcoin has also survived severe setbacks so far. In the past few days, the price of the cryptocurrency raced to a record high. Wall Street bank JP Morgan believes it is possible that Bitcoin will soon compete with gold.

How times change. The head of JP Morgan once described the cryptocurrency Bitcoin as a fraud and predicted that it would end in a crash. In addition, Jamie Dimon announced that he would fire every employee who trades in Bitcoins. Meanwhile, however, his attitude has changed: JP Morgan predicts that Bitcoin can climb to dizzying heights.

To be more precise, to around $ 146,000. Currently, after the recent rapid rise and the much less rapid setback, a Bitcoin costs around $ 31,600.

JP Morgan is now comparing the cryptocurrency with gold: In future, Bitcoin, like precious metal, could be considered a safe haven in times of crisis – and thus compete with gold. But whether that will really happen is open, according to the big bank.

The current value of all Bitcoins amounting to 575 billion dollars would have to rise by 4.6 times in order to reach the level of current private investments in gold, "Bloomberg" quotes the responsible analysts. The essential prerequisite for this, however, is that the immense fluctuation in the Bitcoin rate is reduced to such an extent that it at least approximates the volatility of gold. Only then would sufficient institutional investors consider the cryptocurrency as an investment alternative to the precious metal. But it will take a few more years until that happens. The target price of $ 146,000 is therefore a long-term perspective.

Is it all just speculation?

On Monday, Bitcoin crashed around 17 percent after the price shot up to around $ 34,000 over the weekend. The price had quadrupled in the past few months. Sharp price fluctuations are common with Bitcoin.

Opinions in the financial industry about Bitcoin vary widely. Some see the price gains of the crypto currency as a pure speculative bubble that will soon burst. Others consider bitcoins to be a sensible investment to protect against inflation, for example.

For this year, JP Morgan believes it is entirely possible that the Bitcoin price could climb into the range between $ 50,000 and $ 100,000. But should this happen, this level would not be sustainable, according to the analysts. At least not at the moment.