JPMorgan estimates that Bitcoin is undervalued by roughly $68,000 compared to gold and places its “fair value” in a range of $165,000–$170,000 over a 6–18 month horizon. The call follows a new BTC drop alongside an equities pullback and has implications for institutional investors and crypto market participants.
The reassessment, according to JPMorgan, stems from the recent correction in crypto and a rebalancing of risk across the asset class. The bank argues that October’s pullback—driven by heavy liquidations in perpetual contracts and the $128 million theft from the Balancer protocol—functioned as a deleveraging that reduced the risk of immediate declines.
JPMorgan sets Bitcoin’s market capitalization at around $2.1 trillion versus $6.2 trillion in private investment in gold to support the valuation adjustment. A central piece is the volatility ratio between Bitcoin and gold falling below 2.0, implying Bitcoin now consumes about 1.8 times more risk capital than gold. “It’s a mechanical exercise,” said Nikolaos Panigirtzoglou, referring to the comparative method, from which the bank extrapolates that Bitcoin’s price would need to rise toward $165,000–$170,000 to match gold’s volatility-adjusted exposure.
Implications for Bitcoin market
Signs of growing institutional involvement also underpin the thesis: JPMorgan increased its position in BlackRock’s iShares Bitcoin ETF by 64% and is exploring accepting Bitcoin and Ethereum as collateral in loans. Meanwhile, gold showed marked volatility after surpassing price levels around $4,000, shifting the relative balance between the two assets.
JPMorgan’s thesis carries practical market effects, contingent on its scenario materializing. With short-term risk reduction: the deleveraging could moderate liquidation spikes and improve intraday stability.
With a possible revaluation: a move toward $165,000–$170,000 would imply a sustained rise that may encourage institutional adoption.
The next milestone is the 6–18 month window in which JPMorgan expects Bitcoin’s revaluation, guided by its volatility-adjusted model and institutional flows. Related focus areas include monitoring ETF inflows and the evolution of the Bitcoin/gold volatility ratio, which will inform how closely reality tracks the bank’s thesis.
