JPMorgan: Rising Gold Prices Indicate Bitcoin Could Reach $45,000

Table of Contents

Rising Gold Prices Impact Bitcoin Price

According to a report by The Block, analysts at JPMorgan Chase stated that with gold prices nearing $2,000 per ounce, Bitcoin could potentially reach $45,000. Investors often view gold and Bitcoin as alternative investments, with both assets typically showing similar trends.

In a report released on Wednesday, JPMorgan strategists wrote that with gold prices above $2,000, the value of investment-grade gold held by private investors is estimated to be around $3 trillion. In this scenario, assuming Bitcoin is held equally in private investor portfolios alongside gold, the price of Bitcoin should reach $45,000.

However, JPMorgan believes that $45,000 is the upper limit for the price of Bitcoin, indicating that the asset's growth is constrained by the doubling of mining or production costs. JPMorgan anticipates that the Bitcoin halving event expected in April or May 2024, which will result in a doubling of Bitcoin's production costs, will drive the price up to $40,000. Past halving events have shown that the price of Bitcoin accelerates after this.

JPMorgan's View on Bitcoin and Ethereum

As of the deadline, Bitcoin is trading around the $26K level, and Ethereum is around $1,800, according to The Block's dashboard. JPMorgan stated that Ethereum continues to face selling pressure after the Shanghai upgrade and is expected to underperform Bitcoin in the short term.

JPMorgan remains cautious about digital assets due to potential limitations on the returns of these assets from regulatory crackdowns in the United States, disruptions in cryptocurrency banking networks, and the aftermath of the closure of the FTX exchange. JPMorgan expects a return rate of 25% for Bitcoin in the next 12 months and will monitor the Bitcoin halving event expected in 2024.