The cryptocurrency markets and industry are set for greater acceptance from mainstream investors and companies this year, JPMorgan equity research analyst Kenneth Worthington wrote in a note to clients Friday.
JPMorgan sees 2022 having potential to be “the year of the blockchain bridge (driving greater interoperability of various chains) or the year of financial tokenization.”
Regarding bitcoin, JPMorgan says it’s “particularly well-designed as a modern store of value, and the strong design has contributed to the increased confidence in and value of Bitcoin.” However, bitcoin still comes up short against other stores of value, including gold, given its limited history, according to Worthington.
Additionally, bitcoin’s heightened volatility likely won’t make it a good currency since that “could undermine crypto as a medium of exchange, as a unit of account and as a standard for deferred payments, the other recognized functions of money.” Volatility concerns have not stopped bitcoin from rising in value, however, he added.
Meanwhile, cryptocurrency exchange Coinbase is “still a buy” for investors, as the company is a beneficiary of the growth across the crypto industry, Worthington wrote.
Earlier this week, Goldman Sachs told clients that “hypothetically, if bitcoin’s share of the ‘store of value’ market were to rise to 50% over the next five years (with no growth in overall demand for stores of value), its price would increase to just over $100,000, for a compound annualized return of 17-18% (accounting for growth in bitcoin supply over time).”