J.P. Morgan Forecasts Bitcoin to Hit $170,000 Despite Selloff
According to the U.S. bank, Bitcoin could climb to $170,000 within 6 to 12 months, despite its recent slide.
Quick overview
- J.P. Morgan analysts believe the recent market movements signify the end of a correction phase rather than the beginning of a bearish trend.
- The bank predicts Bitcoin could reach $170,000 within 6 to 12 months, viewing it as undervalued compared to gold.
- The report highlights that the volatility ratio between Bitcoin and gold has decreased, indicating Bitcoin requires more risk capital.
- Recent corrections have improved Bitcoin's long-term outlook and renewed institutional interest.
J.P. Morgan analysts don’t view the latest market moves as the start of a bearish trend but rather as the end of a correction phase.
According to the U.S. bank, Bitcoin could climb to $170,000 within 6 to 12 months, despite its recent slide toward the $100,000 level. The report compares Bitcoin’s performance to that of gold, suggesting the cryptocurrency is currently undervalued relative to the precious metal.
“The deleveraging in perpetual futures appears largely complete,” the note said, citing the October 10 liquidation as a turning point. The normalization of the ratio between open interest in Bitcoin perpetual futures and its market capitalization supports this view, along with the limited ETF outflows seen in recent weeks compared with early October.
Gold as the Key Benchmark
J.P. Morgan’s $170,000 price target is based on Bitcoin’s relative volatility to gold. The volatility ratio between the two assets has fallen below 2.0, meaning Bitcoin now requires 1.8 times more risk capital than gold.
As a result, the bank argues that Bitcoin’s market capitalization of $2.1 trillion would need to rise about 67% to match the $6.2 trillion invested privately in gold. That would imply a mechanical fair value of around $170,000 per Bitcoin.
The analysts also noted that the recent correction has improved the long-term setup and revived institutional interest.
“Bitcoin appears undervalued relative to gold,” the report concludes.
As of Friday, Bitcoin was trading between $99,000 and $100,000, struggling to hold that key support level.
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