Bitcoin News Today: JPMorgan: Bitcoin's Quiet Transformation Into a Stable Institutional Asset

Bitcoin’s current price remains below its estimated fair value as volatility declines to historic levels, according to JPMorgan analysts. In a recent note, the firm argued that Bitcoin's volatility has dropped significantly—from nearly 60% at the start of the year to approximately 30%—creating a more favorable environment for institutional investors and narrowing the risk-adjusted comparison to gold [1]. The analysts, led by managing director Nikolaos Panigirtzoglou, calculated a fair value of around $126,000 for Bitcoin by year-end, suggesting a 13% increase from current levels to align with gold's $5 trillion private investment market [2].

One of the primary factors behind the reduced volatility is the growing accumulation of Bitcoin by corporate treasuries. These entities now control over 6% of Bitcoin’s total supply, a trend JPMorgan likened to central bank quantitative easing following the 2008 financial crisis, which helped stabilize bond markets. This shift has suppressed short-term price fluctuations, making Bitcoin a more predictable asset class. The analysts highlighted the inclusion of corporate holdings such as Strategy (formerly MicroStrategy) and Metaplanet in major equity indices as another contributing factor, as these moves have drawn new institutional capital into the market [1].

Passive inflows into Bitcoin are also being driven by its increasing integration into global financial indices. The inclusion of Strategy in key benchmarks and Metaplanet’s recent upgrade to mid-cap status in the FTSE Russell indices have expanded Bitcoin’s exposure, attracting additional investment. The growing demand for corporate treasuries is further intensifying competition, with new entrants such as KindlyMD seeking to raise up to $5 billion by designating Bitcoin as a primary reserve asset. Meanwhile, Adam Back’s BSTR is reportedly positioning itself to become the second-largest corporate holder of Bitcoin after Strategy [2].

JPMorgan emphasized that the combination of declining volatility, index-driven inflows, and corporate accumulation strengthens Bitcoin’s investment appeal. Lower volatility, they noted, facilitates easier risk capital allocation for institutions, which has brought Bitcoin closer to gold in terms of risk-adjusted performance. The analysts pointed out that the volatility ratio between Bitcoin and gold has dropped to 2.0—the lowest recorded level—indicating that Bitcoin currently requires twice as much risk capital in portfolio allocations compared to gold [1].

Despite the bullish outlook from JPMorgan, some market observers suggest Bitcoin may face a short-term correction before resuming its upward trajectory. Expert analysis indicates that Bitcoin could see a wave 2 relief rally before a deeper pullback to $93,000, though this scenario remains speculative and not directly supported by JPMorgan’s research. The firm’s fair value estimate is based on historical comparisons to gold and current market dynamics, without explicitly forecasting short-term price swings [1].

The broader Bitcoin market has also seen structural developments, such as the formation of American Bitcoin, a new publicly traded entity backed by Donald Trump’s sons and crypto investors like the Winklevoss twins. This merger aims to provide retail and institutional investors with greater access to Bitcoin assets through the Nasdaq, highlighting the industry’s ongoing shift toward traditional financial markets [3].

Source: [1] JPMorgan says current bitcoin price 'too low,' sees upside to $126k by year-end (https://www.theblock.co/post/368653/jpmorgan-says-current-bitcoin-price-too-low-sees-upside-to-126000-by-year-end) [2] Bitcoin Undervalued Compared To Gold, Fair Value At $126,000 (https://finance.yahoo.com/news/bitcoin-undervalued-compared-gold-fair-172230487.html) [3] American Bitcoin, backed by Trump sons, aims to start (https://www.cnn.com/2025/08/28/business/american-bitcoin-trump-sons)