The ongoing debate about whether Bitcoin or gold holds more value continues to heat up. Recently, two prominent figures on opposing sides—Peter Schiff, a staunch gold supporter, and Binance co-founder Changpeng Zhao (CZ)—engaged in a spirited discussion during Binance Blockchain Week, reigniting the tension between the two assets.
Schiff maintained that Bitcoin lacks “real backing,” arguing it’s driven only by “hope and speculation.” He expressed concerns about decreasing interest in Bitcoin, suggesting this trend may make it a riskier investment.
CZ countered Schiff’s claims, asserting that Bitcoin’s global acceptance is growing rapidly, with millions depending on it for transactions, while most gold remains locked away in vaults, inaccessible for daily use.
Around the same time, major banks were exploring new theories regarding Bitcoin’s potential pricing. Rather than choosing sides, JPMorgan introduced a fresh perspective.
The bank revealed a model that aligns Bitcoin’s theoretical valuation with gold, taking into account the volatility in Bitcoin’s price. This model estimates Bitcoin’s value should it adopt a role akin to gold as a store of value.
Currently, the gold market is valued at nearly $29.31 trillion. However, given Bitcoin’s increased volatility, JPMorgan applies a discount when assessing Bitcoin’s fair value.
To illustrate this volatility, let’s consider the price changes for gold and Bitcoin over different timeframes:
-
Over the last three months, gold increased by 17.17%, whereas Bitcoin dropped by 19%.
-
Year-to-date figures show gold has climbed 60.01%, while Bitcoin has decreased by 8.2%.
-
In a five-year span, gold rose 125.97%, compared to Bitcoin, which fell by 3.4%.
If Bitcoin’s volatility persists, this model may lead to a revised theoretical value for it.
According to analysts led by Nikolaos Panigirtzoglou, this framework hints that Bitcoin could approach a price of around $170,000 in the next six to twelve months.
This new prediction comes after one of Bitcoin’s most significant downturns, wherein around $19 billion in digital assets were liquidated in early October, causing Bitcoin to plunge from over $126,000 to nearly $80,000.
As of December 5, CoinGecko reported Bitcoin trading at $89,251.43, reflecting a decline of 3.2% in the past day.
This isn’t the first time JPMorgan has proposed bold long-term projections for Bitcoin.
The bank mentioned in a note dated November 26 that Bitcoin might eventually reach $240,000, pointing out that macroeconomic influences now play a larger role than the traditional four-year halving cycle in the cryptocurrency market.
Notably, the analysts observed, “Cryptocurrencies are transitioning from a venture capital-like environment to a macro asset class supported by institutional liquidity, although this liquidity can still be fragmented, leading to quick price fluctuations.”
Additionally, the bank filed a notification regarding a structured product linked to BlackRock’s iShares Bitcoin Trust ETF (IBIT), which could offer investors the chance for “uncapped” profits through 2028, provided Bitcoin sees significant gains.
JPMorgan also addressed worries regarding Bitcoin’s largest corporate holder, Michael Saylor of MicroStrategy, and speculations about potential delisting from MSCI indexes, suggesting that the impact would be minimal.
They concluded, “We believe that MicroStrategy’s removal from the MSCI index will limit the downside for both MicroStrategy and Bitcoin, as this exclusion is already largely accounted for in current prices.”
Related: JP Morgan states Bitcoin appears undervalued compared to gold.
