Bitcoin is trading below its fair value relative to gold when adjusted for volatility, according to analysts at JPMorgan.
The rise in gold volatility during its rally to all-time highs in October makes the precious metal riskier and Bitcoin (BTC) “more attractive to investors,” analysts said, based on the bitcoin-to-gold volatility ratio falling to 1.8, meaning BTC carries 1.8 times the risk of gold. The report read:
“By taking into account this volatility ratio, which implies that bitcoin currently consumes 1.8 times more risk capital than gold, then mechanically, the market cap of bitcoin at $2.1 trillion currently would have to rise by close to 67%, implying a theoretical bitcoin price of close to $170,000.
This mechanical exercise thus implies significant upside for Bitcoin over the next 6-12 months,” JPMorgan said.
The theoretical price forecast from JPMorgan comes amid lowered BTC price predictions from several market analysts and investment firms after BTC fell below $100,000 on Tuesday, breaching a critical level of psychological support for the first time in four months.
Related: Gold sinks below $4K: What does it mean for Bitcoin price?
Market analysts dampen Bitcoin price predictions
Some analysts now forecast that BTC is unlikely to recover the $125,000 price level by the end of 2025, due to several factors, including macroeconomic headwinds from tariffs and the Oct. 10 market crash that caused the largest 24-hour liquidation in crypto history.
Investment company Galaxy lowered its Bitcoin 2025 forecast to $120,000 from $185,000 on Wednesday, citing several factors, including BTC whales offloading 400,000 coins in October, investor rotation into competing narratives, and changing market dynamics.
“Bitcoin has entered a new phase, what we call the ‘maturity era,’ in which institutional absorption, passive flows, and lower volatility dominate,” Galaxy’s head of firmwide research Alex Thorn said.
The presence of exchange-traded funds (ETFs) soaking up liquidity means that BTC gains will likely come at a slower pace than in the past, Thorn said.
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