①JPMorgan predicts that Bitcoin could rise by 84% in the next 6 to 12 months, as its model forecasts Bitcoin’s trading trajectory to be similar to gold, with a theoretical price nearing $170,000. ②JPMorgan is focusing on two short-term factors influencing Bitcoin's price: the possibility of Strategy selling Bitcoin and MSCI’s decision.
Cailian Press, December 5 (Edited by Huang Junzhi) During this year-end period, $Bitcoin (BTC.CC)$ the market trend has been volatile, with a pervasive bearish sentiment. However, according to JPMorgan, there is no need to worry at present. The firm expects Bitcoin may increase by 84% in the next 6 to 12 months, citing its model prediction that Bitcoin’s trading pattern will resemble that of gold.
A team of strategists led by Nikolaos Panigirtzoglou wrote in a recent client report: “Our volatility-adjusted comparison between Bitcoin and gold still suggests that Bitcoin’s theoretical price is close to $170,000, indicating significant upside potential for Bitcoin in the next 6-12 months.”
As the leader in the cryptocurrency space, Bitcoin has undoubtedly faced a challenging few months. As of this writing, Bitcoin is trading at $92,325.03, down approximately 36% from its all-time high of over $126,000 earlier this year.
However, JPMorgan has long argued that Bitcoin’s trading behavior might align more closely with gold. This was most evident in April this year when concerns over tariffs triggered a historic sell-off in the U.S. stock market, driving capital inflows into Bitcoin and other cryptocurrencies.
The bank’s strategists also noted that they are monitoring two factors that could influence Bitcoin’s price in the short term:
1. The possibility of Strategy selling Bitcoin
Regarding $Strategy (MSTR.US)$ Concerns are rising that the company might sell its Bitcoin holdings, as it is globally renowned for being an early adopter of the cryptocurrency. According to estimates by crypto analytics firm Arkham Intel, Strategy held approximately 437,000 Bitcoins in November, down from a peak of about 484,000 earlier that month.
Phong Le, CEO of Strategy, previously stated that the company might eventually sell its Bitcoin if its mNAV (Market Net Asset Value multiple: the ratio of the company’s market capitalization to its net asset value of cryptocurrencies) falls below the threshold of 1. A price-to-book ratio of 1 for Strategy implies that its stock price reflects no premium over the value of Bitcoin.
The latest data on the company's website shows that this metric is hovering around 1.1.
Moreover, Michael Saylor, the executive chairman of the company, has stopped advocating the firm stance of holding Bitcoin and instead suggested that Strategy might sell some of its Bitcoin holdings.
However, JPMorgan strategists noted that the company recently announced it had raised $1.4 billion in cash reserves. The strategists estimated that this amount would be sufficient to cover expenses such as dividends and interest for approximately two years without requiring the company to sell its Bitcoin. They also added that with these reserves, the likelihood of a forced sale is “lower.”
“If this ratio remains above 1.0, MicroStrategy could ultimately avoid selling its Bitcoin, and the market may find reassurance that the worst of Bitcoin's price decline might be over,” they added.
2. MSCI's Decision
MSCI, the financial index provider, will decide in January whether to exclude companies that invest 50% or more of their assets in digital assets from its indices. The reason cited is concerns that these companies resemble investment funds, which are currently ineligible for inclusion in MSCI indices.
JPMorgan previously estimated that if this rule were implemented, Strategy would be removed from both the MSCI USA Index and the MSCI World Index, potentially resulting in an outflow of approximately $2.8 billion from the stock.
The bank wrote: "On the other hand, if MSCI's final decision is positive, both Strategy and Bitcoin could see a strong rebound to levels seen before October 10. This suggests that, in this scenario, cryptocurrencies may recover to their historical highs."
Editor/Rocky
