The biggest American bank is suddenly very bullish on Bitcoin

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JP Morgan, which is the largest American bank by assets, has softened its previously harsh tone on bitcoin. The bitcoin market has matured since JP Morgan chief executive Jamie Dimon called BTC a “fraud” in September 2017—helped by the (still highly volatile) bitcoin price finding support as an inflation hedge alongside gold in 2020.
Now, JP Morgan has said that strength of bitcoin in 2020 could be set to continue, finding the bitcoin price has “considerable” upside in the long-term as it better competes with gold as an “alternative currency.”
“Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the bitcoin price,” JP Morgan analysts on the bank’s Global Quantitative and Derivatives Strategy team wrote in a note late last week, adding the “potential long-term upside for bitcoin is considerable” and pointing to Millennials becoming “a more important component of investors’ universe” as a potential catalyst.
Bitcoin’s reputation as “digital gold,” particularly among Millennials and younger investors, has swelled this year, boosted by several high-profile investors adopting bitcoin and talking up bitcoin’s prospects.
For bitcoin to catch up to gold’s $2.6 trillion market value the bitcoin price would have to rise 10-fold from its current $13,000 per bitcoin, the bank’s analysts said.
Simultaneously, bitcoin was thrust into the headlines last week when payments giant PayPal PYPL -0.4%, a long-perceived enemy of bitcoin and cryptos, announced it would start allowing its 346 million clients to buy and spend bitcoin and some other major cryptocurrencies.
“Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as means of payment,” JP Morgan analysts added. “The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value.”
However, the note also warned bitcoin “looks currently overbought for the near term,” suggesting bitcoin’s most recent increase higher, that’s seen it add over 20% through October, can be due for a correction.

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