New York-based international bank JPMorgan issued a note on January 26. In the paper, analysts of the bank wrote what is their expected long-term BTC price.
According to the bank, volatility along with constant ups and corrections will prevent future adoption by institutions. The estimations by JPMorgan are based on the relative volatility and market correlation between gold and BTC.
Earlier, in November, JPMorgan experts predicted Bitcoin's long-term value to be $150.000. However, after the recent correction, they see the target at $38.000.
Commenting on the earlier predictions, the analysts said it was unrealistic as it's less likely that the bitcoin to gold volatility ratio will drop as low as two times later this year. Now, the bank assumes that the fair value of Bitcoin is 38.000, considering a ratio of BTC to gold to be 1/4 of the predicted $150.000.
According to JPMorgan, institutions started to consider investing in BTC as the coin provides interests not related to stocks and other asset categories. However, the bank finds that with the recent sell-off, this tendency stopped.
The current price of BTC is around $38.400, which is about 44% lower than the coin’s all-time high of $68,789 reached on November 10.