JPMorgan: Bitcoin (BTC) is Undervalued, $126K Target?
JPMorgan Says Bitcoin's Potential is Far From Priced In
Analysts at JPMorgan, managing approximately $4 trillion in assets, have indicated that Bitcoin (BTC) is currently undervalued relative to gold. According to their recent investor note, Bitcoin's price could increase by 13% to reach a target of $126,000. This valuation would align Bitcoin's private investment with that of gold, estimated at $5 trillion.
Bitcoin's Declining Volatility Fuels Optimism
The JPMorgan research report, led by Nikolaos Panigirtzoglou, highlights a significant drop in Bitcoin's volatility index. Over the past six months, Bitcoin's volatility has decreased from 60% to 30%. This marks the narrowest volatility gap ever recorded between Bitcoin and gold, with Bitcoin now only twice as volatile.
JPMorgan suggests that this reduced volatility, combined with Bitcoin's current undervaluation, positions BTC for increased mainstream adoption. The bank also acknowledges the rising corporate treasury demand for Bitcoin, noting that companies now hold approximately 6% of Bitcoin's total supply.
"Yes, this is the upside we highlighted in our note, which we envisage to be reached by year’s end," Panigirtzoglou commented.
Institutional Interest as a Catalyst
The anticipated Bitcoin price rebound is largely attributed to growing adoption among institutional investors. Data from BitcoinTreasuries indicates that 309 entities, including Michael Saylor’s Strategy, hold 3.68 million Bitcoins as part of their treasury management strategies.
Furthermore, U.S. spot Bitcoin ETFs have rapidly surpassed $100 billion in assets under management. Currently, these ETFs hold approximately $144.5 billion, with BlackRock’s IBIT leading the way with around $83.5 billion.
Broader Adoption Trends
Beyond institutional investors, nation-states such as the United States and El Salvador are also exploring Bitcoin adoption through strategic reserve initiatives.
Market Reaction and Analysis
JPMorgan’s analysis coincided with a temporary Bitcoin price increase before a slight retracement. Bitcoin gained as much as 2.3% to reach $113,479 before settling around $112,272.
Veteran trader Peter Brandt suggests that Bitcoin needs to surpass $117,570 to negate midterm bearish sentiment, pointing to a significant sell order over the weekend linked to capital rotation from BTC to Ethereum (ETH) via U.S. spot ETFs.