According to JP Morgan’s latest report, Bitcoin’s value is currently overvalued by 17%, but BTC can reach $150,000 in the long run.
JP Morgan’s analysis of Bitcoin: the report
JP Morgan’s latest report revises Bitcoin’s long-term price estimates upward. If in a previous analysis the price of BTC was given at $146,000, this time the analysts of the US bank seem even more optimistic.
According to JP Morgan, the fact that it is currently overvalued suggests that Bitcoin will go through a downward momentum.
Currently, the price of BTC is around $42,000. According to JP Morgan’s estimates, Bitcoin is expected to fall back below $40,000 even to touch $35,000. A new ascent should follow.
However, the bank’s experts are puzzled by Bitcoin’s volatility, which they believe is holding back adoption.
“The biggest challenge for Bitcoin going forward is its volatility and the boom-and-bust cycles that hinder further institutional adoption.”
In fact, for JP Morgan, Bitcoin is four times more volatile than gold.
Institutional investors and Bitcoin
But will it be true that institutional investors fear Bitcoin? Probably some are held back by the volatility of BTC, but others realize that Bitcoin can be a valid alternative to traditional safe-haven assets.
For example, in a recent interview with CNBC, Bill Miller confirmed his thoughts, considering Bitcoin a shelter against a financial catastrophe.
Already some time ago, the CEO of Legg Mason Capital Management had admitted to having half of his portfolio in Bitcoin. Now this portion has shrunk due to the falling price of BTC, but the digital asset remains for Bill Miller a substantial investment.
Large companies such as Tesla have also invested in Bitcoin, which has led them to increase their capital given the price increase Bitcoin experienced in 2021.
Bitcoin’s volatility holds back the ECB
That Bitcoin is far too volatile is also the opinion of the ECB. During an AMA made via Twitter to which ECB board member Isabel Schnabel responded, the clear opinion of the European Central Bank once again emerged:
🇪🇺@Isabel_Schnabel: Bitcoin is a speculative asset. The high volatility of its price makes it unsuitable as a store of value. #AskECB https://t.co/FZNANvB23T
— European Central Bank (@ecb) February 9, 2022
The ECB does not intend to buy BTC at the moment because it is a speculative asset, and its volatility does not make it suitable to be a store of value.
The price rise, also related to volatility, could change the minds of many.