JPMorgan strategists consider Bitcoin as more of a “risk” asset rather than a “safe” asset.
Due to how Bitcoin has performed against equity over the past year. JPMorgan strategists led by Nikolaos Panigirtzoglou made the statement in a note published on Friday.
The strategists noted that the correlation between Bitcoin and the S&P 500 has increased. While the correlation between Gold and the S&P 500 has also been mostly positive. As such, they believe both Bitcoin and Gold could be better characterized as a risk rather than safe assets.
They also noted that they believe investors prefer Gold and Bitcoin. Precisely because they are those alternative options as opposed to safe assets.
The JPMorgan strategists reiterated in the note. Believing that BTC’s price could reach $146,000 in the long-term provided that its volatility is able to meet that of gold. They also added that it is likely a multi-year process. Dependent on ownership becoming more institutional and less retail.
In the short-term, however, BTC’s price returning to $40,000 is unlikely according to the strategists. “At the moment, the institutional flow impulse behind the Grayscale Bitcoin Trust is not strong enough for BTC to break out above $40k. As the 4-week pace of the flow into GBTC appears to have peaked,” they noted.
“While bitcoin is currently trading within our fair value range of between $11k and $35k (at current levels of bitcoin volatility). The apparent peaking of the flow pace into the Grayscale Bitcoin Trust and a mechanically decay of our momentum signal till the end of March, both imply that the near term balance of risks is still skewed to the downside.”