- JPMorgan says Bitcoin is undervalued by $16,000 compared to gold on a risk-adjusted basis
- The bank’s report notes that Bitcoin’s six-month volatility has hit a record low of just 30%
- On a volatility-adjusted basis, JPMorgan calculates a fair value for Bitcoin of around $126,000
A sharp decline in Bitcoin’s volatility is fundamentally reshaping its investment case, with JPMorgan analysts now arguing the cryptocurrency is significantly undervalued compared to gold. The bank’s latest research reveals Bitcoin’s six-month realized volatility has been cut in half, plunging from 60% earlier this year to a record low of just 30%.
This historic compression means Bitcoin now trades at only twice the volatility of gold, the narrowest gap ever recorded. The shift signals that the digital asset may require far less risk capital than in the past, strengthening its appeal for institutional portfolios.
What Is JPMorgan’s “Fair Value” for Bitcoin?
The comparison to gold is central to JPMorgan’s argument. On a volatility-adjusted basis, the analysts estimate Bitcoin’s market cap would need to climb by 13% to match the $5 trillion invested in private gold holdings.
This calculation implies a fair value for Bitcoin of around $126,000 per coin, compared to its current price near $112,500. This is a key factor in the current Bitcoin (BTC) price prediction.
Based on this model, JPMorgan calculates Bitcoin is currently undervalued by about $16,000. As Bitcoin behaves more like a mature financial asset, it becomes a more compelling option for long-term portfolio strategies, especially as the BTC price remains stuck near $113K.
How Is Corporate Demand Affecting the Market?
Besides valuation, the declining volatility has broader implications. With Bitcoin behaving more like a mature financial asset, it is becoming increasingly appealing for long-term portfolio strategies.
Consequently, institutions may begin allocating more capital as the risk-reward profile narrows toward traditional assets like gold. Companies gaining index inclusion, such as Metaplanet’s recent upgrade to FTSE Russell’s mid-cap category, are bringing in passive investment flows.
Similarly, Nasdaq-listed Kindly MD is preparing to raise $5 billion after an earlier $679 million Bitcoin purchase, which shows how corporate balance sheet strategies are evolving. New players are also entering the race, with Adam Back’s firm now positioning itself against giants like MicroStrategy, reinforcing the narrative that Bitcoin has moved far beyond speculative demand.
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