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Bitcoin (BTC) continues its 2020 surge with the crypto even breaching the $13,000 mark. But a recent report says that the cryptocurrency's price is set to continue rising even further thanks to the increasing interest from corporations as well as greater participation by millennials.
Various studies have already pointed out that cryptocurrency tends to be more popular among younger investors. A recent report by JP Morgan predicts that the increasing participation by millennials - known for their preference for Bitcoin over gold - in the coming years will be a key factor for the crypto’s future success, according to Bitcoin.com.
“The potential long-term upside for bitcoin is considerable as it competes more intensely with gold as an 'alternative' currency we believe, given that Millenials would become over time a more important component of investors' universe,” JP Morgan said in a note on Friday, Business Insider reported.
The American multinational investment bank projects that BTC could easily triple its current price as it gets more popular in the future as an alternative currency. “Even a modest crowding out of gold as an 'alternative' currency over the longer term would imply doubling or tripling of the bitcoin price,” JP Morgan said.
However, Bitcoin still has a long way to go before it could catch up to gold in terms of size. The investment bank estimates that the “physical gold market is worth $2.6 trillion, which includes assets held within gold ETFs.”
At the moment, Bitcoin’s market capitalization is $242.7 billion based on data from CoinMarketCap. This means that “the cryptocurrency would have to surge 10x from current levels to match the same value of the physical gold market.”
Bitcoin is attractive to investors both as a means of payment as well as a store of value. “Cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as means of payment,” the bank explained. “The more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value.”
Increasing Bitcoin adoption by large corporations will likely close the gap between the crypto and gold much faster. For instance, the coin’s price rose by almost 15 percent after Square announced its BTC purchase on October 8. Similarly, the token breached the $13,000 mark after PayPal’s recent announcement of its cryptocurrency service.
