According to a recent JP Morgan report, the price of Bitcoin may hit the $145,000-mark very soon, but right now, the price may drop even lower, as is evident from the bearish trend in the market. As per Cointelegraph, May has been the worst month for Bitcoin, and in the last ten days, the Bitcoin price dipped from $57,000 to almost $30,000. Nikolaus Panigirtzoglou, one of the JP Morgan strategists, predicted that the Bitcoin price shall continue to hover in the range of $24,000 to $36,000 based on the volatility ratio of Bitcoin to gold.
Bitcoin’s fair value should be around one-fourth of $36,000 or $145,000 based on the volatility ratio between Bitcoin and gold. However, based on the current ratio of volatility between Bitcoin and gold, the fair value of Bitcoin should lie at one-sixth of $24,000 or $145,000. Therefore, the fair value range lies between $24,000-$36,000 on a medium-term basis.
According to the report of the strategists of JP Morgan, institutional investors have become somewhat disinterested in Bitcoin investment ever since the dramatic price drop. As of now, complete equalization of allocations of Bitcoin and gold or full convergence of the two assets is improbable in the near future.
The $145,000-mark is a theoretical Bitcoin price target assuming a favorable convergence between the volatility of Bitcoin and gold and an equalization of the allocation of Bitcoin and the allocation of gold in the portfolios of investors. While most young investors go for Bitcoin, the older investors usually resort to gold for investment. Nonetheless, when the Bitcoin price crashed last month, several crypto investors rushed to invest in gold to save their assets. The target price of $145k can be reached only if investors of the previous generation start investing funds in Bitcoin as they do in gold assets.