Although the fund manager predicts Bitcoin at $ 1 million and as a reserve currency, JPMorgan believes the current set is risky.
The world’s most popular cryptocurrency prices have risen in recent months and set records in succession. Currently, each dong is trading around $ 52,000, after reaching $ 52,600 yesterday.
Anthony Pompliano – co-founder of Morgan Creek Digital Assets believes Bitcoin could reach $ 500,000 by the end of the decade. Chuck, nThat could be up to a million dollars at some point in the future.
“I think Bitcoin will eventually become a global reserve currency. Its capitalization will be many times greater than gold,” he predicted on CNBC.
There are a number of reasons behind the recent launch of Bitcoin. One is the growing participation of retail and institutional investors. In addition, large companies also play the crypto game.
Payment company Square bought Bitcoin last year. Electric car maker Tesla also announced a $ 1.5 billion buy in bitcoin this month. Both Tesla CEO Elon Musk and Square founder Jack Dorsey are supporters of cryptocurrency. Financial institutions like BNY Mellon and Mastercard have also joined.
Meanwhile, global central banks are easing monetary policy, such as lowering interest rates and increasing asset purchases through a quantitative easing program, to mitigate the economic impact of the pandemic. “Billions of dollars have been written and pumped into the economy. Everyone, from individuals to financial institutions and companies around the world, is looking for the best way to protect their purchasing power. Many people have chosen Bitcoin,” Pompliano explains.
The prediction that Bitcoin could reach $ 1 million is based on several factors, including a limited number of $ 21 million, as well as the decentralized nature of the technology. Bitcoin does not control a single body, like a central bank.
Instead, the Bitcoin network is made up of miners. These people use specialized computers to dig up Bitcoin. And since there are so many different miners, no one has control over this network. In addition, since the computer systems they use are also very powerful, Bitcoin proponents claim it is one of the most powerful in the world.
“The more people join this market, the higher the liquidity. The higher the liquidity, the more applications. The more it is adopted, the lower the price volatility will be. It’s evolution.” “Bitcoin will become the backup currency of the Internet generation,” Pompliano said.
Last month, JPMorgan also stated that, for the purpose of competing for gold, Bitcoin’s long-term target would in theory be $ 146,000. Gold has long been considered a “haven” that investors bought at a time of political or financial upheaval. And bitcoin is starting to look like that now.
“Bitcoin competes with traditional gold. Bitcoin is a form of digital gold,” Nikolaos Panigirtzoglou, global market strategist at JPMorgan, told CNBC.
He said the value of gold in the private sector is currently around $ 2.7 trillion. To reach this limit, the price of Bitcoin would have to climb to $ 146,000.
However, this process has many obstacles. The biggest price movement is Bitcoin. This cryptocurrency is known for its high level of volatility. Panigirtzoglou said that Bitcoin is “five times more volatile than gold”.
He said the key to bridging the volatile gap between Bitcoin and gold is institutional adoption. “The higher the speed of acceptance, the narrower the distance will be,” he said.
Compared to the US dollar, Fed Chairman St. Louis James Bullard also confirmed that Bitcoin does not pose a significant threat to the role of the greenback reserve currency. “With the Fed’s policy, the dollar economy will remain global. Whether the price of gold rises or falls, the price of Bitcoin falls or rises, it will not affect,” he said. “The dollar can also be traded electronically.”
In addition, the current Bitcoin growth trend is also potentially risky. Although motivated by institutional investors, the participation of individual investors in this market is still very high.
“The biggest risk is that capital inflows have slowed over the last few months,” Panigirtzoglou said. And so the flow of capital of an individual investor will slow down.
Ha Thu (According to CNBC)