JPMorgan says current bitcoin price 'too low,' sees upside to $126,000 by year-end

The current price of bitcoin is "too low" compared to gold as its volatility has collapsed to record lows, according to JPMorgan analysts.

Bitcoin’s volatility has fallen from nearly 60% at the start of the year to about 30% now — a historical low. As a result, the analysts, led by managing director Nikolaos Panigirtzoglou, said in a Thursday note that bitcoin's fair value sits around $126,000.

"Yes this is the upside we highlighted in our note, which we envisage to be reached by year end," Panigirtzoglou told The Block, sharing the specific timeline.

A surge in corporate treasury purchases, which now account for more than 6% of bitcoin’s total supply, has played a major role in suppressing volatility. JPMorgan compared the dynamic to central bank quantitative easing after 2008, which reduced bond market swings by locking assets into passive holdings.

Passive inflows in bitcoin are also being driven by the global inclusion of equity indices. Strategy’s (formerly MicroStrategy’s) addition to major benchmarks has already drawn new inflows, while Metaplanet’s upgrade to mid-cap status in FTSE Russell indices triggered its inclusion in the FTSE All-World Index, the analysts noted.

Meanwhile, competition among corporate treasuries is intensifying. Nasdaq-listed KindlyMD has filed to raise up to $5 billion after designating bitcoin as its primary reserve, while Adam Back's BSTR is said to be aiming to rival Marathon Digital as the second-largest corporate holder behind Strategy.

The analysts said the combination of corporate treasury accumulation, index-driven inflows, and falling volatility is boosting bitcoin’s investment case. Lower volatility, they added, makes it easier for institutions to allocate capital, with bitcoin and gold now closer than ever in risk-adjusted terms.

The volatility ratio of bitcoin to gold has dropped to 2.0 — the lowest on record — meaning bitcoin currently consumes twice as much risk capital as gold in portfolio allocations, the analysts said. On that basis, bitcoin’s $2.2 trillion market cap would need to rise by around 13%, implying a theoretical price of $126,000, to match the roughly $5 trillion of private gold investment. The analysts also noted the gap has swung from bitcoin trading $36,000 above this fair-value level at the end of 2024 to about $13,000 below it today, pointing to further upside potential.