This year, the increased attention from institutional investors has turned out to be a game-changer for Bitcoin. In fact, some analysts are of the opinion that if the number of these investors continues to increase, then it could end up propelling the crypto to a 1,000% gain in the next few years. Earlier this month, a report was published by analysts at JPMorgan and they suggested that Bitcoin is heading towards record gains in the future if this institutional investors’ acceptance continues. Eventually, the asset could end up beating gold. The paper by the top investment bank began with the acknowledgement of Bitcoin’s price gain in the last month.
According to data from CoinMarketCap, the price of the asset moved from mid-$11,000 level to exceed $15,000. Most of this rally was attributed to the announcement by payment giant PayPal, which said that it would be introducing crypto transaction services from 2021. For the last three weeks, PayPal has been touting its upcoming crypto services and analysts at JPMorgan believe that this could bring more attention towards the top cryptocurrency in the world. JPMorgan focused on institutions and referred to Grayscale Investments, the asset management firm based in New York, which has expanded its Bitcoin Investment Fund and they now have almost $4 billion in assets.
As per JPMorgan, the company’s ascent is an excellent example of institutional investors boosting Bitcoin’s demand rather than individual buyers. The report said that Grayscale Bitcoin Trust’s biggest investors appear to be institutional investors, which reflects their preference to invest in the asset. The analysts also highlighted the parallels between the continued boom in Bitcoin and an excess in the gold markets. Bitcoin’s price continued to soar, but there were modest outflows in gold-based exchange-traded funds (ETFs) in October. According to the JPMorgan analysts, this may indicate that gold investors are turning towards Bitcoin.
Currently, the prediction is that if the trend continues, Bitcoin’s price would go up significantly. There could come a point where Bitcoin’s market cap might crush gold, thereby solidifying the former’s place as the world’s most valuable alternative asset. This is the second optimistic report that has been published by JPMorgan on Bitcoin in the last few weeks. At the end of October, a report was published by the New York-based bank’s Global Market Strategy that highlighted the significant long-term potential of the asset. Like the report last week, this one had also been published after PayPal’s announcement.
In the report, the bank stated that Bitcoin seemed to have a bright future, particularly because a significant share of the investor market may be taken up by Millennials. The bank also mentioned that Bitcoin’s utility had also become apparent, which means that the asset is not just a fad. Currently, gold is ten times more valuable than Bitcoin, keeping in mind market capitalization, but its increased prominence in the future seems inevitable. With greater adoption of cryptocurrencies and more usage of blockchain technology, Bitcoin will certainly break new ground in the future.