Bitcoin could hit $165,000, remains undervalued to gold: JPMorgan

Bitcoin
Bitcoin Photo by FMT licensed under CC BY 4.0.

According to JPMorgan analysts, Bitcoin (BTC) would need to climb roughly 42% on a volatility-adjusted basis to align with gold, with the "debasement trade" seen as a significant catalyst for potential gains.

In a note released Wednesday, the analysts suggested Bitcoin could reach around $165,000 by the end of the year, arguing that the asset remains undervalued compared to gold when adjusted for volatility.

Led by Nikolaos Panigirtzoglou, the team emphasized that the “debasement trade”—where investors turn to assets like Bitcoin or gold to hedge against fiat currency devaluation—could provide upward pressure on BTC.

Panigirtzoglou highlighted that the Bitcoin-to-gold volatility ratio has dipped below 2.0, indicating that Bitcoin now requires just 1.85 times more risk capital than gold—its lowest ratio in years.

“The sharp increase in gold prices over the last month has made Bitcoin look more appealing to investors relative to gold, particularly as the Bitcoin-to-gold volatility ratio continues falling below 2.0,” the note explained.

The analysts also noted that Bitcoin’s market cap would need to grow by about 42%—on a volatility-adjusted basis—to match the nearly $6 trillion held by private investors in gold via ETFs, coins, and bars.

They added that retail investors have played a key role in boosting Bitcoin demand, with spot Bitcoin ETF inflows surpassing those of gold earlier this year. Still, gold saw renewed interest in August amid geopolitical tensions and rising concerns over government deficits.

The report comes as sentiment around Bitcoin strengthens, with the asset reclaiming $120,000 on Thursday following a month of sideways movement. The recent rally is partly driven by optimism around a potential October surge, as social media interest in Bitcoin spiked 34% this week, according to LunarCrush.

Bitcoin ETFs also saw strong inflows this week, reversing the previous week’s net outflows and suggesting that investor buying interest is picking back up.

JPMorgan’s outlook joins a growing number of bullish forecasts for Bitcoin heading into year-end, with other firms like Bernstein and Standard Chartered also projecting price targets approaching $200,000.