Bitcoin could keep rising to astronomical figures and be the next safe-haven asset to rival gold, according to JPMorgan.
The investment bank believes the cryptocurrency could rise as high as US$146,000 (NZ$200,000).
"Bitcoin's competition with gold has already started in our mind," analysts from JPMorgan commented on Tuesday.
"Considering how big the financial investment into gold is, a crowding out of gold as an 'alternative' currency implies big upside for Bitcoin over the long term," the JPMorgan analysts said.
Australian market analyst Kyle Rodda told news.com.au that "this price target is one that would be met in the longer-term" over the next few years, rather than something that might occur at some stage in 2021.
Mr Rodda commented that the Wall Street analysts suggested that "short-term pullbacks in cryptos were possible in the short-term, as speculative activity keeps the price of Bitcoin volatile".
Bitcoin could outshine gold as millennials invest in the "digital gold" currency over the traditional and tangible bullion, the JPMorgan analysts indicated.
This comes after a leaked report from Citi in December 2020 referred to the cryptocurrency as "21st century gold".
Mr Rodda said he didn't believe Bitcoin would replace gold in the long-term.
"I don't think long-term strength in Bitcoin necessarily requires money moving out of gold," Mr Rodda said.
"I think both assets have strong impetus to trend higher in the future – that's what has underpinned the rallies off both assets in 2020, and will continue so long as that dynamic remains."
The cryptocurrency has surged this year, with the price rising past a record A$42,000 for the first time in early January.
Since mid-October, the Bitcoin price has been rapidly climbing from A$15,500.
Bitcoin reached record highs of more than A$27,000 in early December 2020, surpassing 2017's all-time high of A$26,500.
The digital coin has more than quadrupled in value since the start of 2020, with the currency's total value now past $US600 billion ($A780 billion).
Australia head of global cryptocurrency company Luno, Byron Goldberg, told news.com.au that "Bitcoin has long been called digital gold by early adopters".
Investors are seeing the rise in the coin's price a hedge against inflation and an alternative to the depreciating US dollar.
"This view is shifting to institutions who are now seeing the asset as a hedge against inflation and currency debasement," Mr Goldberg said.
"At present, gold has a market cap of roughly US$10 trillion. If 30 per cent of value transfers from gold to Bitcoin over the next few years, the price of a Bitcoin would be worth around US$140,000 – a similar figure to JPMorgan's price target, which is 300 per cent away from here," Mr Goldberg added.
This comes after Mr Goldberg told news.com.au on Monday that the recent surge in Bitcoin could be just the beginning of a wild ride for cryptocurrency in 2021.
"Search trends for Bitcoin are only starting to rise, still only a fraction of what they were at the peak of the 2017 high, implying we are only at the beginning of the bull run," he said on Monday. "This bullish news also relieves the tension that this rally is a momentum rally being lead by irrational speculators."
Mr Rodda added on Monday: "A large part of what we have seen for Bitcoin in the last 12 months is a market looking for alternative stores of value and new ways to diversify in a world of zero per cent interest rates and ultra-loose monetary policy – buying Bitcoin as if it were 'digital gold'."
Investors couldn't contain their excitement when Bitcoin surged from $US32,0000 ($A43,000) to $US33,000 ($A44,200) in a less than a 45 minute trading window this week – and it continues to rally.
Binance Australia CEO Jeff Yew told news.com.au that "people are definitely excited".
"We've seen more people returning to crypto or entering the crypto space for the first time," Mr Yew said.
"There are also more players warming up into the scene as the retail user base continues to grow. Last year alone, we saw an increase in institutional adoption, from publicly listed companies like Square and PayPal who have embraced the digital currency, through to private equity and family offices considering bitcoin as part of their asset portfolio."
Mr Yew added that while it's impossible to accurately forecast whether the current Bitcoin bull run will continue this year, he said: "We can confidently say that the increased positive sentiment over the past 12 months from the retail and institutional crowd will not disappear anytime soon.
"I believe a post-pandemic world will see digital economies mature across many industries, which could garner support to push digital assets to a new level of adoption."
The digital coin, which was invented by an unknown person or group of people using the name Satoshi Nakamoto, exists without a central bank and can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.