According to recent analysis from JPMorgan, Bitcoin may be undervalued compared to gold. The research indicates that the world’s leading cryptocurrency possesses “significant upside” potential if the so-called “debasement trade” continues to gain traction.
The bank’s analysts suggest that Bitcoin could surge to as high as $165,000—approximately 40% above its current price—when adjusted for volatility in comparison to gold. This assessment considers the capital required to hold Bitcoin relative to gold, coinciding with a surge in demand for both assets.
“The significant increase in gold prices over the past month has made Bitcoin more appealing to investors compared to gold, especially as the bitcoin-to-gold volatility ratio continues to decline, now below 2.0,” the analysts noted.
Based on JPMorgan’s analysis, Bitcoin’s market capitalization of $2.3 trillion would need to increase by nearly 42% to align with the $6 trillion invested in gold bars, coins, and ETFs, once relative risk is factored in.
Bitcoin recently concluded the third quarter of 2025 at an all-time high, boosting investor confidence that the price of Bitcoin will continue to rise into the year’s final quarter.
In September, Bitcoin ended the month approximately 5% higher at about $114,000, diverging from predictions of seasonal weakness. Historically, September has been challenging for Bitcoin, but when it has closed positively, the subsequent quarter typically sees substantial gains.
Data indicates that in years like 2015, 2016, 2023, and 2024, positive closures in September have preceded fourth-quarter rallies averaging over 50%.
Bitcoin’s Debasement Trade
The forecast underscores an accelerating trend among investors towards assets perceived as safeguards against the devaluation of fiat currencies. This strategy, known as debasement, has led to increased investment in both Bitcoin and gold exchange-traded funds (ETFs) over the past year.
JPMorgan emphasizes that retail investors are driving this trend, with inflows into spot Bitcoin ETFs initially surpassing gold earlier in 2025.
However, gold inflows have accelerated since August due to heightened geopolitical tensions and renewed concerns regarding fiscal deficits, once again drawing attention to the yellow metal.
The rising interest in Bitcoin and gold reflects broader economic concerns. With ongoing inflation worries, expanding government deficits, and diminishing trust in central bank independence, many investors are reevaluating their faith in fiat currency.
In emerging markets where currency devaluation is more apparent, the allure of holding scarce assets has intensified.
JPMorgan is not definitively forecasting that Bitcoin will reach $165,000. Instead, this serves as a theoretical exercise illustrating where Bitcoin needs to be to match gold when accounting for volatility.
Nevertheless, with an increasing number of ETFs, custodial options, and institutional trading, Bitcoin’s role as a hedge in investment portfolios appears more robust than in past cycles. As of Thursday morning, Bitcoin was trading around $120,000, approximately $45,000 below where JPMorgan’s model estimates it should be.
