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  • JP Morgan noted that the more Bitcoin enjoys acceptance as a means of payment, the more its value will grow.
  • Stock-to-flow (S2F) charts for BTC expects it to hit $288,000 by the next halving cycle.

After calling Bitcoin a fraud back in 2017, it seems that JP Morgan, America’s biggest bank, has considerably softened their stance towards the premier cryptocurrency. Currently, they believe that bitcoin has a considerable upside in the long run and competes with gold as an “alternative currency.”

Cryptocurrency and utility

JP Morgan analysts noted that cryptocurrencies derive their value not just for being a store of wealth but mainly due to their utility as a means of payment. The more it enjoys acceptance as a means of payment, the more its value grows. Also, millennials have fast turned to Bitcoin as an investment option for their wealth adds more credence to their long-term bullish outlook.

Optimistic but with a dose of caution

The note also states that a “modest crowding out of gold” as an alternative currency automatically implies a 2X or 3X growth of BTC’s price. To get a more accurate perspective, let’s check out BTC’s Stock-to-Flow model. Stock-to-flow ratios are used to evaluate the current stock of a commodity (total amount currently available) against the flow of new production (amount mined that specific year). 

Back in September, PlanB, creator of the stock-to-flow (S2F) charts for Bitcoin price models, observed that BTC/USD has been performing exactly as predicted. At the current pace, Bitcoin is expected to hit $288,000 by the time the next halving arrives.

However, it’s not at all sunshine and rainbows. JP Morgan analysts have also noted that the BTC is currently “overbought for the near term.” As such, Bitcoin’s latest price surge that has seen it add over 20% through October might have made it ripe for a near-term correction. Read our latest price analysis report to find out more.