Bitcoin News Today: JPMorgan: Bitcoin's Volatility-Adjusted Undervaluation Drives Rally Case

JPMorgan analysts predict a 40% rally in Bitcoin to $165,000, driven by its undervaluation relative to gold on a volatility-adjusted basisBitcoin Could Reach $165K Based on Gold's Record Run: JPMorgan^[1]. The bank's model calculates that Bitcoin's market capitalization of $2.3 trillion would need to expand by nearly 42% to align with the $6 trillion invested in gold, accounting for risk adjustmentsBitcoin Still Undervalued, JPMorgan Forecasts Rally to $165,000^[2]. This projection hinges on the "debasement trade," a strategy where investors hedge against fiat currency devaluation by allocating capital to assets like Bitcoin and goldJPMorgan Says Bitcoin Is Undervalued, Sees Path To $165,000^[3].

The analysts highlighted that Bitcoin's volatility ratio to gold has fallen below 2.0, indicating it requires only 1.85 times more risk capital than gold compared to higher multiples in previous yearsBitcoin Could Reach $165K Based on Gold's Record Run: JPMorgan^[1]. This shift has made Bitcoin increasingly attractive as a store of value, especially as gold prices surge, amplifying the valuation gapBitcoin Price Prediction by JPMorgan Analysts^[4]. JPMorgan noted that cumulative inflows into Bitcoin and gold ETFs have surged since late 2024, with retail investors driving much of the activityBitcoin Could Reach $165K Based on Gold's Record Run: JPMorgan^[1].

Retail demand has outpaced institutional participation in recent months, though the latter remains significant through CME futuresBitcoin Long-Term Holders Accumulate as Short-Term Traders Exit^[5]. Open interest data shows institutions have been net buyers since 2024, but their momentum has lagged behind retail enthusiasmBitcoin Could Reach $165K Based on Gold's Record Run: JPMorgan^[1]. Meanwhile, Bitcoin ETFs have attracted $675.8 million in daily inflows, with nearly $156 billion locked in ETF holdings, rivaling some gold-backed fundsBitcoin Still Undervalued, JPMorgan Forecasts Rally to $165,000^[2]. This trend underscores Bitcoin's growing integration into mainstream finance.

The debasement trade reflects broader economic anxieties, including inflation concerns, ballooning deficits, and waning trust in fiat currencies, particularly in emerging marketsBitcoin Could Reach $165K Based on Gold's Record Run: JPMorgan^[1]. JPMorgan emphasized that Bitcoin's role as a portfolio hedge has strengthened compared to previous cycles, bolstered by expanded ETF infrastructure and institutional adoptionBitcoin Long-Term Holders Accumulate as Short-Term Traders Exit^[5]. However, the bank cautioned that its projection is a theoretical exercise, not a definitive price targetJPMorgan Says Bitcoin Is Undervalued, Sees Path To $165,000^[3].

Market dynamics suggest Bitcoin remains undervalued by approximately $50,000 relative to its fair value modelBitcoin Still Undervalued, JPMorgan Forecasts Rally to $165,000^[2]. If the debasement trade gains further traction, the bank's analysis implies significant upside potential for the cryptocurrencyBitcoin Could Reach $165K Based on Gold's Record Run: JPMorgan^[1]. Analysts led by Nikolaos Panigirtzoglou noted that Bitcoin's price would need to reach $165,000 to achieve parity with gold, a threshold that could be reached if current trends persistBitcoin Could Reach $165K Based on Gold's Record Run: JPMorgan^[1].