JPMorgan becomes optimistic about Bitcoin and cites ‚long-term upside potential

Report from JPMorgan’s Global Market Strategy Division discusses three reasons for Bitcoin’s long-term upswing.

JPMorgan becomes optimistic about Bitcoin Code and cites long term bullish potential.


JPMorgan, an investment banking giant valued at $316 billion, said the long-term upside potential for Bitcoin (BTC) is „considerable. This new optimistic stance on the dominant cryptomeda comes after PayPal allowed its users to buy and sell crypto.

JP Morgan, from „Bitcoin is a fraud and will explode“ in 2017 to „Bitcoin’s competition with gold“ in 2020.

We have come a long way.

– Krüger (@krugermacro) October 24, 2020

The main factor presented by JPMorgan’s Global Market Strategy division is Bitcoin’s competition with gold. The note, published by Business Insider, says:

„The long-term bullish potential for Bitcoin is considerable if it competes more intensely with gold as an ‚alternative‘ currency, we believe, as generation Y would over time become a more important component of the investor universe“.

Analysts also identified the large valuation gap between Bitcoin and gold. It is said that at least US$ 2.6 trillion is stored in gold exchange traded funds (ETFs) and bars. In contrast, BTC’s market capitalization remains at $240 billion.

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JPMorgan lists three factors for BTC’s discharge

The JPMorgan note essentially emphasized three main reasons to support Bitcoin’s long-term growth potential.

First, Bitcoin needs to increase 10 times to match private sector gold investment. Second, cryptomycins are very useful. Third, BTC may attract the millennium generation in the long term.

Following the integration of crypto purchases by PayPal and the rapid increase in institutional demand, Bitcoin is increasingly being seen as a safe haven asset.

There is a huge difference in the valuation of gold and Bitcoin. Although the former has been recognized as a safe haven asset for a long time, BTC has many distinct advantages. JPMorgan analysts said:

„Mechanically, the market capitalization of Bitcoin would have to increase 10 times from here to correspond to the total private sector investment in gold through ETFs or bars and currencies.

One of the advantages of Bitcoin over gold is its usefulness. Bitcoin is a blockchain network, essentially. This means that users can send BTC to each other in a public ledger, efficiently and practically. To transfer gold, physical delivery is required, which becomes a challenge.

As seen in many cold wallet transfers, it’s easier to move $1 billion in capital in the Bitcoin blockchain than with physical gold. The bank’s analysts explained more:

„Cryptomoins get value not only because they serve as deposits of wealth, but also because of their usefulness as a means of payment. The more economic agents accept cryptomoks as a means of payment in the future, the greater their usefulness and value will be.

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The monthly Bitcoin price chart. Source:
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Bitcoin is still at an early stage in terms of infrastructure, development and predominant adoption. As published by the Cointelegraph, only 7% of Americans have purchased Bitcoin, according to one study.

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Some important markets, such as Canada, still lack a well regulated exchange market. The major banks have not yet provided custody of crypto assets, and this gives Bitcoin a great deal of room to grow over the next five to ten years.