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While Bitcoin might be trying to regain some momentum after the US Federal Reserve minutes rocked the market, high-end investors have weighed in on where they see the cryptocurrency headed to at the end of the year.
JPMorgan Chase, one of the world’s leading investment banks, recently asked its clients where they predict Bitcoin price will be at the end of 2022. The results, although not extremely bullish, show that there’s a positive idea that the future of crypto will hit prices above where it is currently trading.
In its poll, JPMorgan asked “Where do you see Bitcoin trading at 2022 year-end?”
According to the results, only 5% of the respondents were bullish about Bitcoin’s trading value, estimating that Bitcoin will tag a price of $100, 000 USD and over. 9% believe that Bitcoin will go to $80,000 USD (over $10,000 USD more than its all-time high) and 41% think it will reach and hold $60,000 USD. Of the respondents, 45% think Bitcoin has a bearish year ahead with 2% predicting the token will sink to $10,000 USD and lower, 23% seeing it fall to $20,000 USD and 20% believing it will drop to $40,000 USD. Overall, the survey shows a positive response to the future of the cryptocurrency market.
This might not be surprising, given Bitcoin has had a massive two years rallying over the time the world has been knocked by the global pandemic. Some investors believe Bitcoin might have a volatile year ahead.
JPMorgan’s Nikolaos Panigirtzoglou, the writer behind the research note for the survey at JPMorgan, noted: :
“I’m not surprised by Bitcoin bearishness. Our Bitcoin-position indicator based on Bitcoin futures looks oversold. The coin’s fair value is between $35,000-$73,000, depending on what investors assume about its volatility ratio versus gold.”
Is Bitcoin a tech asset?
Following the recent news of the Fed minutes, the cryptocurrency market took a quick dip in price. This coincided with a similar drop faced by the Nasdaq Composite Index (which are shares related to tech companies) which fell by 2.7%. The S&P 500 also took a knock, falling by under 2%. This suggests that investors might perceive Bitcoin as a tech asset, rather than a store of value or a hedge against fiat. While this might the case for some investors, there wasn’t a major reaction from the institutional investors or the whales. Over 2021, the US dollar saw the highest inflation rate it has seen in decades and Bitcoin came out strong at the end of the year, proving itself an excellent hedge.
Arcane Research believe that Bitcoin, having outperformed gold and the S&P 500 over the past year, will remain on the same trajectory, noting their prediction:
“Bitcoin will outperform the S&P 500 in 2022.”
However, Arcane also noted that Bitcoin is perceived as an on-risk asset given the volatility and sell-offs throughout the year.
“Fear in the broad financial markets directly affected bitcoin’s performance. Spikes in the volatility index VIX have accompanied bitcoin sell-offs – suggesting that, as of now, institutional traders broadly view bitcoin as a risk-on asset. Therefore, be aware of stock market headwinds in the next year and their possible implications for bitcoin’s short-term price trajectory.”