The Bitcoin community is pleased: The US bank JPMorgan Chase recently announced how they assess the future opportunities of Bitcoin (BTC) there. Accordingly, Bitcoin has a better chance than gold of becoming an alternative currency in the future. This is apparently confirmed by the generally good price trend of the king of crypto currencies.
JPMorgan cited millennials as the reason for this forecast . These are open to crypto currencies and thus also to Bitcoin. The older generations are more conservative and continue to prefer gold as a store of value, it said. Compared to the older cohorts, however, the millennials are currently not economically significant enough, which also has an impact on the importance of Bitcoin.
Cryptocurrencies are still newbies
JPMorgan estimated the value of the gold market at around $ 2.5 trillion. If one compares this with the total market capitalization of the crypto market, which was 341 billion US dollars on October 29, 2020 , the size ratio becomes apparent. The gold market is currently around 7.3 times larger than the entire crypto market, which also often fluctuates strongly. In order to reach gold, the capitalization of the crypto market would have to increase tremendously. JPMorgan stated:
For Bitcoin to be considered as an alternative to gold in the long term, it would have to double or triple the price.
After all, it is remarkable what Bitcoin has achieved in a short time. Gold has been in demand as a store of value and means of payment for millennia. Bitcoin has only been around for a little over ten years. Nevertheless, in this short period of time, the cryptocurrency has succeeded in making itself known as at least the second standard alongside gold and has achieved a market capitalization that corresponds to more than 11 percent of the capitalization of the gold market.
In their statement, JPMorgan added that the reasons for holding Bitcoin could also change. Bitcoin does not necessarily have to be used only as a store of value. The bank pointed out that the value of cryptocurrencies also lies in the fact that they can be used as a means of payment .
JPMorgan went on to say that it sees significant long-term benefits for Bitcoin. Bitcoin is a stronger competitor for gold than is (generally) believed. Millennials would become bigger and more important players in finance over time. With them, cryptocurrencies and Bitcoin would come.