Bitcoin: Top investment bank predicts crypto to hit $188,000 in the long term

One of the world's largest investment banks has theorised that cryptocurrency Bitcoin could reach as high as US$146,000 ($188,430), but it won't happen in 2021.

In a research note, JPMorgan & Chase analysts claimed that as money from traditional gold investments flowed to Bitcoin, the two would compete for investment capital.

With Bitcoin as an alternative "safe haven" to gold, the analysts gave Bitcoin a long-term price scenario of US$146,000.

READ MORE: Bitcoin bubble could burst, warns expert

But the crypto's recent rally – which has seen it push to record highs – may still have some more legs before retreating.

"The valuation and position backdrop has become a lot more challenging for Bitcoin at the beginning of the New Year," the research note states.

"While we cannot exclude the possibility that the current speculative mania will propagate further pushing the Bitcoin price up toward the consensus region of between $50,000-$100,000, we believe that such price levels would prove unsustainable."

READ MORE: Bitcoin maintains high after mammoth Christmas rally

Currently one Bitcoin is worth US$33,989 ($43,852).

In early September, Bitcoin was valued at around US$10,000 – meaning in four months it has gained almost 240 per cent in value.

But investing in Bitcoin is not without risk.

In late 2017 the cryptocurrency spiked at more than $25,000 before dropping to $10,500 a month later – essentially wiping more than half its value in 30 days.

READ MORE: Skyrocketing Bitcoin hits new high of US$28,000

Explained: What is Bitcoin?

1. Bitcoin is a form of online cryptocurrency that allows money to be transferred electronically. It's decentralised, which means no-one regulates or controls it except for market demand.

2. It was created by a group (or a single person) of programmers under the pseudonym "Satoshi Nakamoto" in 2009.

3. Bitcoins are "mined" by computers that solve incredibly complex mathematical equations. Like coal or oil, there is a limited number of Bitcoins available to be mined, estimated to be in the ballpark of 21 million.

4. You cannot mine Bitcoin on your home computer, it requires specialised programs and hardware that have increased the difficulty of mining a Bitcoin.

5. Bitcoin experienced a dramatic explosion in value in late 2017, before it experienced one of the most catastrophic value crashes ever seen in currency.

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