Last Updated on May 28, 2023 by Bitfinsider
According to JPMorgan analysts, the current gold price of nearly $2,000 per ounce would infer a bitcoin price of $45,000, as the two assets tend to move in tandem and are viewed as alternatives by investors.
“As the price of gold rises above $2,000, the value of gold held for investment purposes outside of central banks is currently worth approximately $3 trillion.” In turn, this implies a $45,000 price for bitcoin under the presumption that bitcoin is equivalent to gold in the portfolios of private investors in terms of risk capital or volume,” JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note on Wednesday.
JPMorgan views the $45,000 price of bitcoin as a ceiling, signifying that the asset has limited potential beyond the increase driven by the doubling of mining or production costs. According to JPMorgan, the impending Bitcoin halving in April or May 2024 will mechanically double Bitcoin’s production costs to approximately $40,000. “This is because bitcoin’s production cost has historically acted as an effective lower bound,” JPMorgan strategists explained. Indeed, the previous halving events of 2016 and 2020 were accompanied by an acceleration in the bullish trajectory of bitcoin prices.
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