On Monday (January 4), a team of J.P. Morgan global market strategists led by Nikolaos Panigirtzoglou reportedly wrote in a note to clients that over the long term Bitcoin’s price could get to $146,000 and higher.
Dr. Panigirtzoglou is a Managing Director at J.P. Morgan who works on Global Market Strategy. He edits the weekly publication “Flows & Liquidity”, which is one of J.P. Morgan’s flagship publications. Before joining J.P. Morgan in 2004, he worked as a Financial Economist at the Bank of England. Dr. Panigirtzoglou holds a PhD in Finance from Queen Mary University of London, an MSc in Economics from London School of Economics, and MSc in Economics and Finance from Warwick Business School.
According to a report published by Bloomberg on Tuesday (December 5), Panigirtzoglou and his team wrote:
“A crowding out of gold as an ‘alternative’ currency implies big upside for Bitcoin over the long term… a convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is in our mind a multiyear process. This implies that the above-$146,000 theoretical Bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.”
As for the short term, the J.P. Morgan strategist are concerned there might currently a little too much speculation going on:
“The valuation and position backdrop has become a lot more challenging for Bitcoin at the beginning of the New Year… While we cannot exclude the possibility that the current speculative mania will propagate further pushing the Bitcoin price up toward the consensus region of between $50,000-$100,000, we believe that such price levels would prove unsustainable.”
Last year, in the October 23 edition of the “Flows & Liquidity” report, Panigirtzoglou also talked about the long-term potential of Bitcoin.
Here are a few highlights from that report:
- “… Bitcoin could compete more intensely with gold as an ‘alternative’ currency over the coming years given that millennials will become over time a more important component of investors’ universe.”
- “… given how big is the financial investment into gold at the moment, a crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term.”
- “… the market cap of bitcoin would have to rise 10 times from here to match the total private sector investment to gold via ETFs or bars and coins.”
- “Millennials and corporates endorsement of bitcoin have also induced greater interest by institutional investors as evidenced by the spike in activity across both bitcoin futures and options at CME, and that was before PayPal’s endorsement this week.”
The fact that J.P. Morgan’s Global Markets Strategy team feels comfortable repeatedly talking about the huge long-term potential of Bitcoin shows that the firm’ stance on Bitcoin has greatly softened since September 2017 when Jamie Dimon, chairman and CEO of JPMorgan Chase called Bitcoin a “fraud.”
According to a report by Bloomberg, on 13 September 2017, after calling Bitcoin “a fraud”, Dimon went on to say that Bitcoin was “worse than tulip bulbs.” And if a JPMorgan trader began trading in Bitcoin, the J.P. Morgan CEO said that he would “fire them in a second.”
He went on to say that:
“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars. So there may be a market for that, but it’d be a limited market.”