JPMorgan's Bold Call: Bitcoin Priced to Chase Higher, Currently Trading Below Fair Value

Bitcoin is trading at a significant discount to its fundamentals, according to JPMorgan analysts. With the cryptocurrency’s current price sitting around $88.15K, there’s a notable gap between where it is and where JPMorgan believes it should be—approximately $126,000 by year-end.

The Volatility Story: Why Bitcoin’s Risk Profile is Changing

The key to understanding this valuation shift lies in a dramatic compression of Bitcoin’s volatility. Earlier this year, Bitcoin’s price swings hovered near 60%, but this metric has now compressed to around 30%—marking the lowest volatility on record for the digital asset. This stabilization isn’t coincidental; it reflects deeper structural changes in how Bitcoin is being absorbed into institutional portfolios.

As volatility falls, Bitcoin becomes a more attractive risk-adjusted investment. Lower price fluctuations mean institutions can allocate capital with greater confidence, shifting Bitcoin’s risk-adjusted valuation closer to that of gold than ever before.

The Gold Comparison: A Convergence Moment

JPMorgan’s analysis hinges on a critical observation: Bitcoin and gold’s volatility ratio has collapsed to 2.0—an all-time low. This means Bitcoin now requires twice the risk capital compared to gold in portfolio construction, fundamentally changing how investors should value the two assets.

Consider the math: Gold commands roughly $5 trillion in private investment, while Bitcoin’s market capitalization sits at $2.2 trillion. For Bitcoin to achieve proportional adoption levels relative to its volatility profile, it would need to grow by approximately 13%—translating to a theoretical price target of $126,000.

From Undervalued to Opportunity

The shift is striking. At the end of 2024, Bitcoin traded roughly $36,000 above this fair value level. Today, it’s approximately $13,000 below—a complete reversal that suggests further upside potential. Multiple forces are working in Bitcoin’s favor: corporate capital accumulation, index-driven inflows, and the volatility compression itself all point toward continued appreciation.

The narrative is clear: lower risk, better institutional structure, and attractive valuation create a compelling case for why Bitcoin still has runway to chase higher targets in the near term.