America’s biggest bank, JP Morgan Chase, recently released a rare statement on the world’s flagship crypto, where it said that Bitcoin has what it takes to challenge gold’s status as the go-to alternative financial asset.
When compared to other financial assets like gold and crude oil, Bitcoin looks relatively small, considering that it has a market capitalization of $242 billion, compared to the precious metal’s (Gold) $2.6 trillion market value. However, this means the crypto has more room for upside and can potentially compete with gold as the preferred alternative currency.
In a report credited to Business Insider, America’s most valuable bank, JPMorgan Chase, gave valuable insights on why it believes the odds are with Bitcoin to keep rising in value.
“Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the bitcoin price,” JPMorgan Chase said.
And over time, Bitcoin could be held for other reasons such as for making payments, not just for being a store of wealth as gold is, according to JPMorgan Chase.
“Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as a means of payment. The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value,” JPMorgan Chase explained.
What you should know
It’s important to note that such a bullish call by an American elite bank is coming on macros that BTC has a circulating supply of 19 million coins and a max supply of 21 million coins, meaning there are about 2 million left to be mined.
- Taking into account that about 4 million Bitcoins have been lost forever as a result of BTCs’ owners dying, and their next of kin not having access to such cryptos, it is fair to say there are only about 15 million BTC presently in circulation to cater for over 7 billion people fighting to have a stake in Bitcoins. This means that as BTC becomes scarce and more popular, it is only a matter of time before crypto asset valuation will hit the roof.
- As the general economic law states, when demand is high and supply is limited, prices of such products usually go up.
- Another strong fundamental increasing the odds on the world’s most popular crypto is that it’s almost impossible to forge, and has strong durability characteristics.
- Thanks to its complexly designed decentralized blockchain network, it will take you more than a supercomputer to make such an attempt. Also, you have to confuse all players in the blockchain network, in accepting such forged digital coin.