JPMorgan JPM analysts believe Bitcoin BTC/USD is trading below its fair value as its price volatility falls to historic lows, narrowing the asset’s risk-adjusted gap with gold.
Volatility in Bitcoin has slid from nearly 60% earlier this year to roughly 30%, the lowest level on record.
What Happened: Analysts led by Nikolaos Panigirtzoglou said this dynamic implies a fair value near $126,000, a target they expect could be reached by year-end, according to The Block.
A major driver of the decline in volatility has been corporate treasuries, which now hold over 6% of Bitcoin’s total supply.
JPMorgan compared the phenomenon to the post-2008 bond market, where central bank quantitative easing dampened swings by locking assets into balance sheets.
Passive inflows are also increasing as Bitcoin gains exposure in equity indices.
Strategy MSTR has been added to key benchmarks, while Metaplanet’s MTPLF upgrade to mid-cap status brought its inclusion in the FTSE All-World Index.
Both developments have fueled new allocations from institutional investors.
Also Read: Bitcoin And Ethereum’s Liquidity-Driven Highs Expose Fragility At All-Time Peaks: Report
Why It Matters: Competition among treasuries is intensifying.
KindlyMD NAKA, listed on Nasdaq, has filed to raise up to $5 billion after naming Bitcoin as its reserve asset.
Meanwhile, Adam Back’s BSTR is reportedly aiming to become the second-largest corporate holder of Bitcoin, trailing only Strategy.
Analysts said these trends, treasury demand, index-based inflows, and declining volatility, strengthen Bitcoin’s investment profile.
Lower volatility, they added, makes it easier for institutions to allocate risk capital, putting Bitcoin closer to gold in portfolio terms.
The volatility ratio of Bitcoin to gold has fallen to 2.0, its lowest ever.
JPMorgan estimates Bitcoin’s $2.2 trillion market capitalization would need to rise about 13%, bringing its price to roughly $126,000, to match the $5 trillion private gold market.
They noted that Bitcoin traded $36,000 above this level at the end of 2024 but is now about $13,000 below it, underscoring potential upside.
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