According to a new report issued by financial giant JPMorgan, the volatility often acquainted with bitcoin has been declining over the past few weeks. This, in turn, could lead to further institutions looking to get their fingers on the world’s number one digital currency by market cap.
JPMorgan: We’re Seeing Less Price Swings with BTC
Over the past eight months, the world has been privy to increased institutional activity in the crypto space. Many largescale companies – such as MicroStrategy, Massachusetts Mutual and Tesla – have sought to purchase large amounts of bitcoin which has ultimately helped the currency’s price increase tenfold over a relatively short period.
However, one likely remembers a time when this was not common. Bitcoin, at one stage, was considered one of the most – if not the most – volatile assets on the planet. Very few people were confident when it came to buying BTC and adding it to their portfolios given that the asset was still relatively new and there was a good chance that whatever price it was at today would not stick around too long.
This would also get in the way of the primary goals attached to bitcoin and its altcoin cousins. Many cryptocurrencies, bitcoin included, were initially designed to serve as methods of payment that could eventually push fiat currencies and credit cards to the side. Developers imagined a time when bitcoin and its digital cousins would be used as the only methods of payment for goods and services, but it has taken many years for this vision to become realized, and things are still slow.
Many companies have refused to accept BTC as a payment method over the years given how volatile it has been. For example, if you walk into a store and purchase $50 worth of merchandise with BTC, but the store does not convert it to fiat right away and tomorrow your $50 becomes $30 due to a price dip, you will still get to keep everything you bought while the store will lose out on profit. It is not entirely fair, and this has prevented bitcoin from reaching the top.
Now, however, things appear to be really changing for the world’s primary form of crypto. JPMorgan claims in its report that investors can expect to see competition regarding BTC grow in the coming weeks as more institutions seek to buy it thanks to its lagging vulnerability to price swings.
Gold Is Still A Little Stronger
In addition, JPMorgan explains that bitcoin is becoming a major competitor for gold, though the precious metal still ranks higher. The report states:
Considering how big the financial investment into gold is, any such crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term. Mechanically, the bitcoin price would have to rise [to] $130,000 to match the total private sector investment in gold.