Current Gold Prices Point to a $45,000 Bitcoin Valuation, According to JPMorgan
Amid the ongoing digital revolution reshaping the financial industry, Bitcoin (BTC) has emerged as a strong competitor to challenge the traditional dominance of gold to preserve value and safeguard against inflation.
That being said, analysts at JPMorgan have suggested that the price of gold implies that Bitcoin should be trading much higher than its current price. They argue that many investors view the two assets as interchangeable.
According to JPMorgan analysts, considering gold’s current price of slightly below $2,000 per ounce, the leading cryptocurrency should ideally be trading around $45,000. This stands in contrast to Bitcoin‘s current trading price of $26,512, which is nearly 70% lower than the price level proposed by the strategists.
However, it is important to note that Bitcoin’s relatively short existence of 14 years compared to gold’s centuries-long history as a store of value may not convince everyone that both assets serve the same purpose.
Consequently, institutional investors, who primarily rely on safe-haven assets, continue to favor gold, while retail investors find Bitcoin more appealing.
Additionally, JPMorgan’s strategists have considered another factor that could potentially impact Bitcoin’s price in the future—the halving event.
Bitcoin halving refers to a scheduled occurrence that takes place approximately every four years, reducing the rate of new Bitcoin creation by half. This leads to a decrease in the supply of new coins entering the market, potentially affecting the cryptocurrency’s price. The number of tokens miners receive for processing transactions and maintaining the security of the blockchain also gets halved during this event.
READ MORE: Bitcoin (BTC) Could Break Below $25,000 – Here is Why
The next halving event is anticipated to occur in April or May of the coming year and is projected to double the mining cost of 1 BTC to roughly $40,000.
However, in the short term, JPMorgan’s analysts express a lack of optimism regarding Bitcoin’s price due to the ongoing regulatory backlash against digital assets. They cite concerns such as the U.S. regulatory crackdown, disruption to crypto ecosystem banking networks, and the aftermath of the FTX collapse as factors likely to impede any potential upward movement.
As of the time of writing, Bitcoin is priced at $26,514, displaying a 1% increase over the past 24 hours. Although the cryptocurrency has experienced a 6.6% decline in the last month, it has still recorded a substantial 60% year-to-date gain, marking a notable recovery from the price crash in 2022.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
