Bitcoin News Today: Bitcoin's Volatility-Adjusted Undervaluation Sparks $165K Outlook – JPMorgan

JPMorgan analysts have identified a significant potential for Bitcoin to rise to $165,000 by year-end, driven by the "debasement trade" as investors seek hedges against fiat currency devaluationBitcoin Price (BTC) Analysis: 'Debasement Trade' to …^[1]. The bank's models suggest that Bitcoin, currently trading at approximately $119,000, is undervalued relative to gold on a volatility-adjusted basis. A 40% increase would align Bitcoin's risk capital exposure with gold's $6 trillion in private holdings, including ETFs, bars, and coinsBitcoin Price (BTC) Analysis: 'Debasement Trade' to …^[1]. This projection follows a surge in retail inflows into Bitcoin and gold ETFs since late 2024, accelerated by concerns over inflation, government deficits, and declining trust in fiat currencies, particularly in emerging marketsJPMorgan sees bitcoin hitting $165,000 by year-end on …^[2]. Cumulative flows into spot Bitcoin and gold ETFs have risen sharply, with gold ETF inflows narrowing the gap with Bitcoin since AugustBitcoin Price (BTC) Analysis: 'Debasement Trade' to …^[1].

The debasement trade reflects a broader shift in investor behavior, with Bitcoin and gold serving distinct roles as alternative stores of value. JPMorgan notes that institutional participation in the trade has slowed compared to retail demand, with institutions primarily using CME futures rather than ETFsBitcoin Price (BTC) Analysis: 'Debasement Trade' to …^[1]. Meanwhile, Bitcoin's relative appeal has strengthened as gold prices surged in recent weeks, reducing the Bitcoin-to-gold volatility ratio to below 2.0. This metric indicates Bitcoin now consumes 1.85 times more risk capital than gold, reinforcing the bank's view that Bitcoin remains undervaluedJPMorgan sees bitcoin hitting $165,000 by year-end on …^[2].

Comparative analyses highlight divergent functions for Bitcoin and gold in portfolios. André Dragosch of Bitwise Asset Management argues that gold remains the preferred hedge during equity market downturns, while Bitcoin increasingly serves as a counterweight to bond market stressBitcoin vs. Gold: Which Is the Better Hedge Asset in …^[3]. Historical data supports this split: gold has shown resilience during stock market corrections, such as the 2022 bear market, whereas Bitcoin's performance has been more closely tied to U.S. Treasury yields and fiscal policy concernsBitcoin vs. Gold: Which Is the Better Hedge Asset in …^[3]. In 2025, gold has outperformed Bitcoin, gaining over 30% year-to-date compared to Bitcoin's 15% rise, reflecting their distinct correlations with equities and bondsBitcoin vs. Gold: Which Is the Better Hedge Asset in …^[3].

Gold's dominance in 2025 is further fueled by central bank demand, inflationary pressures, and global political uncertainties. Central banks have significantly increased gold reserves, creating structural demand that has pushed prices to record highs. The Federal Reserve's expected rate cuts have also bolstered gold's appeal as a non-yielding asset, while Bitcoin's relationship with interest rates remains less predictable. Political risks, including U.S. government shutdown fears and geopolitical tensions, have reinforced gold's status as a traditional safe-haven asset. Conversely, Bitcoin's volatility and regulatory uncertainties have limited its adoption by institutional investors, who often favor gold's established liquidity and regulatory clarity.

Despite gold's outperformance, Bitcoin's technical indicators suggest potential for a sharp upside. Seasonal patterns, including historically strong performance in October and November, and breakout structures in price charts indicate possible momentum shiftsWhy Gold is Beating Bitcoin in 2025 - Analytics Insight^[5]. JPMorgan's $165,000 target reflects a narrowing valuation gap between Bitcoin and gold, which swung from a $36,000 overvaluation of Bitcoin at year-end 2024 to a $46,000 undervaluation todayJPMorgan sees bitcoin hitting $165,000 by year-end on …^[2]. Analysts caution that correlations between assets are not static, and Bitcoin's ties to equities have strengthened in 2025 due to ETF inflowsBitcoin vs. Gold: Which Is the Better Hedge Asset in …^[3]. However, both assets are seen as complementary: holding them together can enhance portfolio diversification and optimize risk-adjusted returnsBitcoin vs. Gold: Which Is the Better Hedge Asset in …^[3].

The debate over Bitcoin and gold as "digital gold" versus traditional safe haven underscores their distinct roles in modern finance. While gold's centuries-old reputation as a store of value remains unchallenged, Bitcoin's potential as a hedge against fiat devaluation and inflation is gaining traction. Regulatory clarity and institutional adoption will likely determine whether Bitcoin can close the gap with gold in the coming months. For now, the debasement trade continues to attract retail and institutional capital, with JPMorgan's analysis suggesting Bitcoin's upside could exceed current expectations if the trend persistsBitcoin Price (BTC) Analysis: 'Debasement Trade' to …^[1].