According to leading global investment banking giant JPMorgan Chase & Co., Bitcoin's potential surge to $45,000 may be imminent. This comes amid the rising price of gold, another asset closely linked to Bitcoin's market dynamics.
The current bullish trend of gold may propel Bitcoin's price to the projected $45,000 mark, analysts at JPMorgan suggest. Both assets are perceived as similar by investors and often exhibit tandem movements. The upward trend in gold price, held for investment purposes outside central banks, could trigger a similar rise in Bitcoin, anticipated around the $45,000 mark, respecting certain proportions.
This insight was provided by JPMorgan strategists, led by Nikolaos Panigirtzoglou, in an official statement. However, they see this price as an upper limit, suggesting a limited potential for the asset due to the increasing mining costs and the upcoming Bitcoin halving.
The impending "halving" of Bitcoin, due in April or May 2024, would effectively double Bitcoin's production costs. Past halving events in 2016 and 2020 were accompanied by a bullish trend for Bitcoin, which accelerated particularly after each "halving". But JPMorgan doesn't necessarily anticipate a repeat of this pattern.
The halving event, occurring approximately every four years, cuts the reward for mining new #bitcoin blocks in half, effectively slowing down the creation of new BTC. This is done to control inflation and preserve the asset's scarcity over time.
The upcoming Bitcoin halving will see the block reward halved from 6.25 to 3.125 BTC.
Additionally, JPMorgan predicts a 25% return on Bitcoin in the next 12 months. This is primarily because the impending halving, expected in 2024, is anticipated within this time frame.
As for Ethereum (ETH), JPMorgan suggests that the cryptocurrency may continue to face selling pressure in the short term following the Shanghai upgrade until mid-year: "We expect Ethereum to underperform Bitcoin somewhat in the short term."
Overall, the bank maintains a cautious stance on digital assets, fully aware of the headwinds from US regulatory crackdowns and the ongoing repercussions of the FTX exchange crash that could limit any potential gains.
