Original Title: 《Bitcoin’s Fair Value Is $170K, JPMorgan Argues in Gold-Based Model》

Written by: Helene Braun

Translated by: Mars Finance, Daisy

According to risk capital metrics, the bank states that Bitcoin's value should reach two-thirds of the private investment base in gold, higher than the current level of approximately $102,000.

Key Points Overview:

• JPMorgan analysts predict that based on the historical valuation relationship between Bitcoin and gold, Bitcoin could rise to $170,000 within the next 6 to 12 months.
• They noted in a report released on Thursday that the recent decline in the crypto market was primarily due to forced liquidations in perpetual futures, but the market's deleveraging phase is largely over.
• With increased investment in gold and Bitcoin being relatively undervalued, JPMorgan believes there is significant upside potential for Bitcoin in the coming months.

JPMorgan analysts in their latest forecast indicate that Bitcoin still has ample room for growth—and it could come quickly. They expect this cryptocurrency to reach as high as $170,000 within the next 6 to 12 months.

In a report released this week, strategist Nikolaos Panigirtzoglou and his team pointed out that the deleveraging in the crypto derivatives market (especially in Bitcoin perpetual futures) is largely over, laying the groundwork for the market to restart its upward trend.

The report stated: "The recent stabilization in the market suggests that the deleveraging process in Bitcoin perpetual futures may have ended." This refers to a series of sell-off events during October and November, when the market experienced massive liquidations and a $120 million loss due to a hack on Balancer.

JPMorgan's price prediction is based on a comparison with gold. Bitcoin has long been viewed as "digital gold," but the bank's model shows that, on a risk-adjusted basis, Bitcoin's current trading price is far below its fair value.

The report assumes that Bitcoin requires 1.8 times the risk capital compared to gold. Considering the current private gold investment of approximately $6.2 trillion (including ETFs, gold bars, and coins), to match this investment scale, Bitcoin's market capitalization would need to grow by about two-thirds—from the current approximately $2.1 trillion to the corresponding level. This implies that Bitcoin's price could reach $170,000, a significant increase from the current approximately $102,000.

This stands in stark contrast to the situation at the end of 2024—when Bitcoin's trading price was far above the fair value estimated by JPMorgan's model.

The analysis team stated that Bitcoin's price is currently about $68,000 lower than the fair value benchmark based on gold.

This prediction comes at a time when there is a noticeable change in investors' cross-asset allocation behavior. JPMorgan noted that retail investors continue to buy U.S. stocks and gold, but as gold volatility increases, Bitcoin may increasingly become the preferred asset for hedging against stock market risks. Recently, both central banks and retail investors have significantly increased their gold purchases in dollar terms, but from a risk-adjusted return perspective, Bitcoin currently appears more attractive.

JPMorgan also downplayed market concerns about the tightening of reserves in the U.S. banking system spreading to the broader market. The bank believes that while liquidity in the banking system is indeed under pressure, overall money supply and non-bank liquidity are still expanding, which continues to support risk assets such as stocks and crypto assets.

However, JPMorgan emphasized that this prediction is not based on market sentiment or short-term momentum judgments. "This is a model-based mechanical extrapolation," the analysis team wrote.

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