-
JPMorgan claims Bitcoin is undervalued $16,000 when compared to gold
-
According to the bank’s report, Bitcoin’s volatility over the past six months has reached a record low at just 30%
-
JPMorgan calculates that Bitcoin is worth around $126,000
JPMorgan analysts believe that the sharp decline in Bitcoin volatility has fundamentally changed its investment case. They now argue that the cryptocurrency is undervalued when compared to gold. The bank’s research shows that Bitcoin’s six month realized volatility has dropped from 60% earlier this summer to a new record low of 30%.
Bitcoin is now trading at twice the volatility of Gold, the smallest gap ever recorded. The shift indicates that the digital asset could require much less risk capital in the future, increasing its appeal to institutional portfolios.
What is JPMorgan’s “fair value” for Bitcoins?
JPMorgan’s argument is based on the comparison with gold. According to the analysts, Bitcoin’s market capitalization would have to increase by 13% on a volatility-adjusted base to match the $5 trillion in private gold holdings.
This calculation suggests that Bitcoin is worth around $126,000 per coin compared to the current price of $112,500. This is an important factor in the current Bitcoin price prediction.
According to this model, JPMorgan estimates that Bitcoin is currently undervalued at $16,000. Bitcoin is becoming more mature as a financial asset. This makes it a better option for long-term investment strategies, especially since the BTC price is stuck at $113K.
How does corporate demand affect the market?
The declining volatility has wider implications than just the valuation. Bitcoin is becoming more attractive for long-term investment strategies as it behaves like a mature asset.
Institutions may start allocating more capital to traditional assets such as gold, as the risk-reward profiles narrow. Companies that are included in indexes, such as Metaplanet, which was recently upgraded to FTSE Russell mid-cap, attract passive investment flows.
Kindly MD, a Nasdaq-listed company, is also preparing to raise $5 Billion after a $679 M Bitcoin purchase. This shows how corporate strategies are evolving. Adam Back’s company is now competing against giants such as MicroStrategy. This reinforces the narrative that Bitcoin is far more than a speculative investment.
This site is for entertainment only. Click here to read more
