JPMorgan: Comparing gold investment data, Bitcoin is about to peak

Original Author: JP Morgan

Compiled by: Odaily Planet Daily Nan Zhi

This Thursday, a team of analysts at JPMorgan led by Nikolaos Panigirtzoglou released a research report on Bitcoin ETFs, stating: "Risk is a frequently overlooked key factor, and Bitcoin should be matched with gold in investment portfolios." The report indicated that the total value of gold held for financial investment purposes is $3.3 trillion, and if Bitcoin's market value rises to the same level, its price would more than double.

(Odaily Planet Daily Note: Based on 67,000 USDT, Bitcoin's current market value is $131.64 billion, which is 150% away from $3.3 trillion. The total market value of gold is $14.5 trillion.)

The report pointed out that most investors consider risk and volatility when allocating across assets, and Bitcoin's volatility is about 3.7 times that of gold, thus expecting Bitcoin to achieve a nominal amount in portfolios equivalent to gold is unrealistic (i.e., its market value is unlikely to reach $3.3 trillion). If Bitcoin is matched with gold in risk investment, the reasonable market value should be $3.3 trillion divided by 3.7, which equates to $890 billion.

Analysts stated, "This implies that Bitcoin's (reasonable) price is $45,000, significantly lower than the current level. In other words, at the current price of $66,000, Bitcoin's allocation in investors' portfolios has already exceeded that of gold based on volatility adjustment."

ETF Inflows Expected to Reach $62 Billion

Of the $3.3 trillion gold held for financial investment, only 7% is held in fund form, approximately $230 billion, while the rest is stored in the form of bars and coins.

Therefore, similarly calculated with a volatility ratio of 3.7, the reasonable scale for Bitcoin ETFs is approximately $62 billion, which is also the potential upper limit for Bitcoin ETFs, likely to be achieved within two to three years over time. However, a significant portion of net inflows may come from the ongoing rotation from existing (investment) tools to ETFs.

(Odaily Planet Daily Note: Dune statistics show that Bitcoin spot ETFs currently hold 791,085 BTC, with assets under management reaching $53 billion, leaving only a $9 billion gap from the reasonable scale proposed by JPMorgan.)

Farside Investors data shows that as of March 8 at 3 PM, the cumulative net inflow since the Bitcoin spot ETF was launched is $9.37 billion.

Thus, if the same pace is maintained, it will reach JPMorgan's predicted upper limit by May this year.

Reference: Previous Prediction Reports from JPMorgan

Odaily Planet Daily has compiled previous reports from the JPMorgan analyst team led by Nikolaos Panigirtzoglou, with their recent predictions and views as follows:

February 29 Report: The halving event in April may trigger a significant drop in Bitcoin prices, expected to fall to $42,000;

February 22 Report: Retail investor enthusiasm for cryptocurrencies rebounded in February, which may be one of the reasons for the strong rise in the cryptocurrency market this month. The main themes are AI and Meme; (Note: The closing price of WLD on that day was 8.15 USDT, and PEPE closed at 0.0 {5} 121 USDT)

January 25 Report: Profit-taking in GBTC has basically ended, and Bitcoin's downside potential is limited; (Note: The closing price of BTC on that day was 39,961 USDT)

January 18 Report: With profit-taking in GBTC, Bitcoin prices may face greater pressure; (Note: The closing price of BTC on that day was 41,327 USDT)

January 12 Report: The likelihood of Ethereum spot ETF approval before May is no more than 50%;

January 11 Report: A total of $36 billion is expected to flow into Bitcoin spot ETFs throughout 2024, while GBTC is expected to see an outflow of $13 billion.