Can bitcoin rise to $1 million? The long short camp has fallen out and JP Morgan warns of risks

Source: in the past few months, the price of bitcoin has soared, breaking through $50000 for the first time this week, and now it has reached the $52000 mark. The super bulls believe that bitcoin will eventually reach $1 million and become a reserve currency. Anthony pompliano, co-founder and partner of Morgan Creek digital assets, a cryptocurrency hedge fund, said bitcoin could reach $500000 by the end of the decade. Eventually, he added, the price of each bitcoin could reach $1 million, but did not give a specific time. The agency’s view of bitcoin is based on several factors, two of which are the scarcity of bitcoin (the upper limit of bitcoin is 21 million), and the decentralized nature of the technology. The so-called decentralization refers to the fact that no central organization is needed to verify the transaction, that is to rely on all nodes to verify the authenticity of the transaction. Pompliano also pointed out that as more and more people enter the market, liquidity will increase, eventually leading to a more stable price of bitcoin. He even believes that bitcoin will eventually become the global reserve currency of the Internet generation. In CNBC’s latest edition of beyond the valley, more and more people are joining bitcoin. From big hedge funds to “America’s oldest bank” – Bank of New York Mellon, from companies to providers of payment systems, bitcoin has become increasingly popular. Rick Rieder, BlackRock’s head of fixed income, confirmed that BlackRock was entering bitcoin investment. According to BlackRock’s filings with the securities and Exchange Commission, BlackRock listed bitcoin futures as a potential investment in its two funds in January 2021. On the one hand, institutional and retail investors are actively participating in the bitcoin boom. Big companies are also increasingly involved in cryptocurrencies. Square bought some bitcoin last year, and according to a paper filed this month, Elon Musk’s electric car maker Tesla bought about $1.5 billion. Both musk and square Founder Jack Dorsey are supporters of bitcoin. At the same time, global central banks have been loosening monetary policy, such as reducing interest rates and purchasing assets through quantitative easing programs, to help cushion the economic impact of the new coronavirus. There is no central institution like the central bank that can control bitcoin, pompliano said, discussing the reasons behind the bitcoin boom. Instead, the bitcoin network is made up of miners who process transactions. These miners operate a large number of specialized computers to carry out the bitcoin mining process. Because there are many different miners, no single entity can control the network. Moreover, because the computers they use are usually very powerful machines, bitcoin supporters claim that the network is one of the most powerful computer networks in the world. J.P. Morgan: unless the volatility of bitcoin eases, it will be difficult to sustain its rise. Although many institutions continue to be bullish after the bitcoin boom, there are also institutions that warn of the risks behind it and believe that its rise is unsustainable. JP Morgan is one of them. In January 2021, Morgan issued a report to its customers, setting the “theoretical” long-term target price of bitcoin at $146000. As bitcoin has begun to compete with gold for safe haven status, it still has higher premium space. However, JP Morgan also warned about the high volatility of bitcoin, saying in a report released on February 17 that the real price volatility of bitcoin in three months was 87% and that of gold was 16%. That is, bitcoin is five times more volatile than gold. JPMorgan strategists say the key to the convergence of bitcoin volatility and gold is the acceptance of institutions. “The faster institutions accept, the faster volatility converges,” he says JP Morgan believes that bitcoin’s current rally is still risky, although it is driven by institutional investors, but the participation of retail investors is also very high, and believes that there is not enough buying to maintain a high level of bitcoin. Nikolaos pangirtzoglou, JP Morgan global market strategist, said: he added: “the biggest risk is that the liquidity impulse we’ve seen in the past few months has slowed down significantly from now on, especially when the economy reopens, people come back to the office and they trade at home less, so retail flows start to slow down from then on,” he added JPMorgan said the momentum to push bitcoin up to a record $50000 or more is unsustainable unless bitcoin price volatility eases quickly. (bitcoin price daily chart) this paper is composed of CICC online foreign exchange network and self Huitong network

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