TL;DR Breakdown
- Bitcoin’s volatility has been decreasing over the past few weeks, and JPMorgan says the crypto is becoming appealing to institutional investors.
- The bank predicts a $130,000 BTC in the long term as volatility keeps dropping.
The high volatility of Bitcoin (BTC) is blamed as one of the major factors preventing mainstream adoption amongst institutional investors. However, over the recent months, BTC’s volatility has been decreasing, thus, becoming more appealing for deep-pocketed investors looking for less-volatile assets for diversification.
JPMorgan, a leading American investment bank, said the price of Bitcoin could increase significantly if the volatility continues to drop.
JPMorgan targets $130,000 BTC
As the bank explained on Thursday, the high volatility of the cryptocurrency “acts as a headwind towards further institutional adoption” from a risk management aspect. Institutions tend to keep away from high-correction assets. However, over the past weeks, Bitcoin’s volatility has been reducing, and JPMorgan noted it’s ideal to “reinvigorate” interest in Bitcoin amongst risk-minded institutional investors.
In the long-term, JPMorgan predicted that the price of Bitcoin could soar to $130,000 if the volatility can converge with that of gold.
“A convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is likely a multi-year process. This implies that the above $130,000 theoretical bitcoin price target should be considered as a long-term target,” the bank added.
According to the Bitcoin volatility time series charts, the 30-day BTC/USD volatility is at 3.52 percent of the 29th of March.
Corporate BTC investors
Regardless of the crypto’s volatility, many publicly-listed companies have allocated their cash reserve to Bitcoin. These include MicroStrategy, Square, MassMutual, Galaxy Digital, including Tesla, the electric car company founded by Elon Musk.
These companies accept the cryptocurrency as a better store of value and inflation hedge and have allocated billions of dollars into Bitcoin.
