Bank of America stated that the 21 million supply cap of the leading cryptocurrency Bitcoin has an important place in keeping it as an inflation hedge or store of value. He also said that the cryptocurrency has been increasingly traded as a risk asset since July of 2021.
Bitcoin Traded as a Risk Asset
Analysts led by Alkesh Shah, global crypto and digital asset strategist at Bank of America (BofA), have prepared a research report. According to the prepared report; On January 31, he noted that correlations between Bitcoin and the S&P 500 stock index and Bitcoin and the Nasdaq 100 index had reached all-time highs. It was also emphasized in the report that this rate reached 99.73 percent.
In addition, the bank stated that the correlation between Bitcoin and gold, which is often seen as a hedge against inflation or a store of value, has remained close to zero since June last year.
The volatile price makes it less likely that Bitcoin will be adopted as an inflation hedge for investors in developed countries. Bank of America expects cryptocurrencies to trade as risk assets until the volatility of deflationary tokens like Bitcoin drops.
JPMorgan raises price forecast for Bitcoin
JPMorgan has raised its Bitcoin target to $150,000. Bitcoin, the largest cryptocurrency by market cap, could reach $150,000, according to the long-term price prediction made by American banking giant JPMorgan. There is some upward revision in the previous estimate of $146,000.
According to this estimation, the market value of Bitcoin should be around $2.7 trillion. Bitcoin's highest market cap so far was $1.3 trillion, seen on November 10.
The latest situation in Bitcoin
Bitcoin (BTC) turned its direction up in the afternoon transactions and rose as high as $ 44,400 during the day. While the total market cap of Bitcoin has risen to $ 835.96 billion, its market dominance rate has decreased as inverse rates to its price. Bitcoin dominance rate has dropped below 42% today.
Bitcoin Fear and Greed Index, which rose to 48 yesterday, had left the fear zone and entered the neutral zone. The index continues to rise today and is worth 54, showing that the moderate mood in the market continues.