The analysts at JPMorgan are making a bold prediction: according to their latest calculations, Bitcoin could soar to $170,000 within the next six to twelve months. Their reasoning? A simple comparison between the volatility of Bitcoin and that of gold, and for the first time in months, it clearly favors crypto.
The market rocked but now ‘deleveraged’
After the storm on October 10, where the market saw the biggest liquidations of perpetual contracts in the history of crypto, the tension seems to be easing. BTC had then lost nearly 20% from its highs, a move amplified by a second episode of forced sales on November 3, amid panic related to the hack of Balancer exceeding $120 million.
But for Nikolaos Panigirtzoglou, managing director at JPMorgan, this purge mainly allowed to reset. The ratio between open interest on BTC futures and market capitalization has returned to normal levels. ‘The deleveraging phase is likely behind us,’ summarize the team of analysts.
On the Ethereum side, the correction was less brutal on perpetual markets but more pronounced on the CME, where liquidations affected ETH contracts more than BTC. Even the withdrawals observed in crypto ETFs in recent weeks remain anecdotal compared to the significant inflows from early October.
A resurgence of attractiveness against gold
Since the rise in gold’s volatility, Bitcoin is gaining ground in institutional investors’ portfolios. The BTC/gold volatility ratio has fallen below 2.0, meaning Bitcoin now ‘consumes’ only 1.8 times more risk than gold, compared to much higher levels before.
Based on this, JPMorgan analysts estimate that to align the value of the Bitcoin market (about $2.1 trillion) with the $6.2 trillion invested in gold by the private sector, the price of BTC should rise by nearly 67%, reaching a theoretical level of $170,000.
A simple mechanical calculation, admittedly, but it sets the tone: at equal volatility, Bitcoin remains significantly undervalued compared to its golden equivalent.
A revised upward forecast
On October 6, Bitcoin already hit a historic high of over $126,000 before facing the famous liquidation on October 10. A month earlier, JPMorgan saw its ‘fair value’ around $165,000 by the end of the year. The new estimate now pushes this target towards $170,000, proof that the momentum remains intact despite the correction.
This morning, Bitcoin is trading around $102,000, slightly down 1% over 24 hours. If JPMorgan’s scenario plays out, the king of cryptos could still gain over $65,000 in the coming months, a potential few traditional assets can offer today.
