The investment bank JPMorgan sees three main reasons for great growth potential in Bitcoin.
The $ 316 billion investment bank JPMorgan describes the long-term potential of Bitcoin ( BTC ) as „considerable“
This new optimism towards the market-leading cryptocurrency comes only a short time after the large payment service provider PayPal announced that it wanted to include cryptocurrencies in its own range of services.
The main reason JPMorgan’s Global Market Strategies division cites for their confident view is the competitive nature of Bitcoin and gold. To this end, a letter from the investment bank that Business Insider has received says:
„Bitcoin’s long-term potential is substantial as it increasingly competes with gold for ‚alternative‘ currency status, as millennials (young generations) become an increasingly important part of the investment market over time.“
In this context, the analysts also point out the currently still massive difference in the market values of Bitcoin and gold. The market capitalization of gold from exchange-traded funds (ETFs) to gold bars is at least 2.6 trillion. US dollars, while Bitcoin only hits $ 240 billion. So the cryptocurrency still has a lot of room to grow if it actually catches up with the precious metal in the favor of investors.
JPMorgan cites three main reasons
JPMorgan’s letter sees a total of three main reasons that make up Bitcoin’s long-term growth potential.
Firstly, as just mentioned, Bitcoin would have to grow by a factor of ten in order to achieve the same market value as gold, secondly, cryptocurrencies have a very high level of usability and thirdly, BTC could be particularly popular with the younger generations in the long term.
PayPal’s recent entry into the crypto market and the rapidly increasing interest of institutional investors shows that Bitcoin is indeed increasingly perceived as a gold-style security tool.
There is currently still a massive difference between the cryptocurrency and the precious metal in terms of market value, but gold has been a store of value and a means of security for a long time. However, Bitcoin has unique advantages that make even JPMorgan analysts optimistic about the cryptocurrency’s chances in a duel.
One of these advantages is the usability of Bitcoin. The cryptocurrency is based on a blockchain, which in turn means that its users can send the financial product to one another in an efficient and uncomplicated manner using this network. In order to transfer gold, however, the physical exchange of the precious metal is required, which is often only possible with great effort.
Accordingly, it is a lot easier to transfer $ 1 billion in capital in Bitcoin via a blockchain than to move the same amount in gold. The analysts of the investment bank further explain:
“Cryptocurrencies get their value not only because they act as a store of value, but also because they are a means of payment. The more the economy accepts cryptocurrencies as a means of payment in the future, the higher their usability and value. “
How big is the potential?
In many ways, Bitcoin is still in its infancy, as Cointelegraph reported , with just under 7% of Americans having ever bought Bitcoin.
In addition, there is still a lack of clear crypto regulation in many countries, which is why financial institutions have so far refrained from storing crypto currencies or even including them in their range of services. Biticoin still has plenty of room to grow in the next five to ten years, which makes a market value comparable to gold quite conceivable.