JPMorgan Predicts Long-Term Bitcoin Price of $150K — Outlines Challenges Ahead

Global investment bank JPMorgan has predicted that the long-term price of bitcoin will reach $150K while the fair value of the cryptocurrency sits at $38K. “The biggest challenge for bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” JPMorgan’s analysts explained.

JPMorgan’s Bitcoin Price Prediction

Global investment bank JPMorgan has revealed its prediction for the long-term price of bitcoin as well as the cryptocurrency’s fair value.

JPMorgan Chase & Co.’s strategists, led by Nikolaos Panigirtzoglou, wrote in a research note published Tuesday that their long-term theoretical target for bitcoin is $150K, up from $146K predicted last year.

At this level, bitcoin’s total market value would be on par with that of all gold held privately for investment purposes, they explained.

The analysts clarified that bitcoin’s “fair value” is around $38K, up from $35K estimated last year.

They calculated the coin’s fair value based on bitcoin being roughly four times as volatile as gold, adding that if the volatility differential narrows to three times, then the fair value of BTC would rise to $50K.

The JPMorgan strategists wrote:

The JPMorgan strategists wrote:

The biggest challenge for bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption.

At the time of writing, the price of bitcoin is $43,855 based on data from Bitcoin.com Markets. BTC is up almost 19% over the past seven days and almost 5% in the last 30 days.

Meanwhile, a JPMorgan client survey shows that the majority of respondents expect bitcoin’s price to reach $60K or more this year. The firm currently offers some crypto investments to clients.

Nonetheless, JPMorgan CEO Jamie Dimon continues to warn people about investing in crypto, citing that the assets have no intrinsic value. He called bitcoin worthless in October last year, questioning its limited supply.

What do you think about JPMorgan’s bitcoin price prediction? Let us know in the comments section below.

GOLD PRICE FORECAST: XAU/USD RALLIES ABOVE $1860 AS US INTELLIGENCE REPORT RUSSIA COULD INVADE UKRAINE NEXT WEEK

11 February 2022, 21:10

• Geopolitical developments sent the yellow metal skyrocketing above $1,860.
• XAU/USD threatens to break a nine-month-old downslope trendline around $1,850-60.

Gold (XAU/USD) approaches the weekend on the right foot, up 2.36% in the week at press time. At the time of writing, XAU/USD is trading at $1,850. Since around 18:30 GMT, geopolitical developments concerning the Ukraine – Russia conflicts spurred a jump of $20 since 18:35GMT from $1,840 to $1,860.

According to a PBS NewsHour reporter, “the US believes that Russian President Vladimir Putin has decided to invade Ukraine and already communicated those plans to the Russian military. Two Biden administration officials said they expect the invasion to begin as soon as next week.”

The reporter continued “that US defense officials anticipate a “horrific, bloody campaign” that begins with two days of bombardment and electronic warfare, followed by an invasion, with the possible goal of regime change. Reportedly, the North Atlantic Council was briefed on the new intel today.”

Putting this aside, the financial market mood is dismal, as US equities trade in the red, while the greenback underpinned by US Treasury yields up, climbs 0.28%, at 95.85. 

Friday’s US economic docket was light in the North American session. The University of Michigan Consumer Sentiment Index for February came at 61.7, lower than the 67.5 estimated and trailed the January 67.2 figure. Concerning inflation expectations for 1 and 5 years, consumers expect it at 5.0% and 3.1%, respectively. 

On Thursday, the St. Louis Fed President, James Bullard, on an interview with Bloomberg, said that he favors 1% of rate increases to the Federal Funds Rate (FFR) by July 1st. When asked about a 50 bps increase in the March meeting, he said he does not want to “prejudge that meeting.”

XAU/USD Price Forecast: Technical outlook

The XAU/USD is neutral biased, but geopolitical issues sent the yellow-metal surging towards a nine-month-old downslope trendline, around $1850-60 region, which, if it gives way, would expose the November 16th, 2021 high at $1,877, followed by June 1st, 2021 daily high at $1,916.61.

GBP/JPY REMAINS ON THE DEFENSIVE NEAR 157.00 MARK, DOWNSIDE SEEMS CUSHIONED

11 February 2022, 10:23

• GBP/JPY witnessed some selling on Friday and extended the overnight modest pullback.
• The risk-off impulse benefitted the JPY’s relative safe-haven status and exerted pressure.
• The BoE-BoJ policy divergence should help limit any meaningful downfall for the cross.

The GBP/JPY cross remained depressed through the early European session and was last seen trading just a few pips above the daily low, around the 157.00 mark.

The cross extended the overnight modest pullback from the 158.00 round figure, or the highest level since October 2021 and witnessed some selling during the first half of the trading on Friday. The risk-off impulse in the markets underpinned the Japanese yen's relative safe-haven status and exerted some pressure on the GBP/JPY cross.

Growing market acceptance that the Fed will adopt a more aggressive policy response to combat high inflation triggered a fresh bout of the global risk aversion trade. This was evident from a sea of red across the equity markets, which, in turn, forced investors to take refuge in traditional safe-haven assets and benefitted the JPY.

On the other hand, the British pound was weighed down by a broad-based US dollar strength and failed to gain any respite from mixed UK macro releases. The UK Office of National Statistics reported that the economy contracted less than anticipated, by 0.2% in December, and expanded by 1% during Q4 2021 as against expectations for the 1.1% increase.

Separately, the UK Industrial/Manufacturing Production figures and a larger than estimated traded deficit did little to impress traders or provide any impetus to the GBP/JPY cross. The downside, however, remains cushioned, at least for now, amid the divergence between the Bank of England and the Bank of Japan monetary policy outlooks.

It is worth recalling that the BoE raised its benchmark interest rate by 25 bps last week – marking the first back-to-back hike since 2004. Adding to this, four out of nine MPC members voted for a more aggressive 50 bps hike in borrowing costs. Conversely, the BoJ has repeatedly said that it would retain its ultra-loose monetary policy.

The fundamental backdrop still seems tilted in favour of bullish traders. This, in turn, warrants some caution before confirming that the recent strong move up from the 200-day SMA has run out of steam. That said, tensions over the Northern Ireland protocol of the Brexit agreement might hold back traders from placing fresh bullish bets around the GBP/JPY cross.

USD/CAD REFRESHES THREE-DAY HIGHS BUT RETREATS UNDER 1.2700 POST-US INFLATION REPORT

10 February 2022, 16:50

• The USD/CAD appears to fade the US inflation report, which came higher than estimated.
• US Treasury yields rise, led by the 10-year benchmark note at 2%.
• USD/CAD Technical Outlook: Neutral biased, confined to the 1.2650-1.2790 range.

The USD/CAD pares Wednesday’s losses as the US inflation in January grinds higher, reaching a 40-year high, while the US central bank prepares to begin its tightening cycle. At the time of writing, the USD/CAD is trading at 1.2693.

On Thursday, the Department of Labor reported that January’s inflation rose by 7.5%, higher than the 7.3% estimated annually based. Excluding volatile items like energy and food, also called Core Consume Price Index (CPI), broke the 6% threshold, higher than the 5.9% expected, the most witnessed since 1982.

Market’s reaction

The USD/CAD initial reaction was upwards, from 1.2670s region to 1.2714, though stalled around February0s 9 daily high. Meanwhile, the US 10-year Treasury yield reached the 2% mark in the bond market, rallying more than five basis points after the US inflation report.

An absent Canadian economic docket left USD/CAD traders adrift to US macroeconomic data. On the US front, alongside the inflation figures, Initial Jobless Claims for the week ending on February 5, increased 223K, lower than the 230K estimated by economists, while Continuing Jobless Claims stayed unchanged at 1621K compared to the revision of the previous week.

USD/CAD Price Forecast: Technical outlook

The USD/CAD is confined to the 1.2650-1.2790 area. The 50-day moving average (DMA) at 1.2703 above the spot price is resistance, capping moves since Monday, while the 100 and the 200-DMA at 1,2616 and 1.2519 are almost “horizontal” well below the exchange rate.

That said, the USD/cad first resistance would be the aforementioned 50-DMA. Breach of the latter would expose the January 28 cycle high at 1.2796. Once that is broken, the USD/CAD will have a clear path towards December’s 2021 swing high at 1.2963.

S&P 500 OPENS SHARPLY LOWER AFTER HOT US INFLATION DATA

10 February 2022, 16:39

Wall Street's main indexes came under strong bearish pressure on Thursday after the data from the US showed that inflation continued to rise at the beginning of the year.

The S&P 500 Index was last seen losing 1.15% at 4,535, the Dow Jones Industrial Average was losing 0.75% at 35,500 and the Nasdaq Composite was falling 1.4% at 14,285.

The US Bureau of Labor Statistics reported that inflation, as measured by the Consumer Price Index (CPI), jumped to 7.5% on a yearly basis in January from 7% in December. This reading surpassed the market expectation of 7.3%. Additionally, the Core CPI, which strips food and energy prices, climbed to 6% from 5.5%, compared to analysts' estimate of 5.9%.

Meanwhile, the benchmark 10-year US Treasury bond yield is up nearly 3% on the day at 2% and the CME Group FedWatch Tool shows that markets are pricing a 50.2% probability of a 50 basis points Fed rate hike in March.