New research from JPMorgan suggests that Bitcoin could be significantly undervalued when compared to gold, projecting a potential climb for the world's largest cryptocurrency to as high as $165,000. This estimate, approximately 40% above its current levels, is based on volatility-adjusted comparisons with gold and reflects the capital allocation needed to hold either asset. JPMorgan analysts highlighted that the recent surge in gold prices has made Bitcoin more appealing to investors, especially as the Bitcoin-to-gold volatility ratio continues to decrease, falling below 2.0.

According to JPMorgan's calculations, for Bitcoin's market capitalization of $2.3 trillion to match the $6 trillion invested in gold bars, coins, and ETFs, it would need to increase by nearly 42% after adjusting for relative risk. This analysis coincides with a period of heightened demand for both assets, driven by the ongoing 'debasement trade'—a strategy where investors seek hedges against fiat currency devaluation. Retail investors have been particularly active, initially driving spot Bitcoin ETF inflows faster than gold ETFs earlier in 2025. However, gold inflows have since caught up, boosted by geopolitical tensions and concerns over fiscal deficits.

Bitcoin concluded the third quarter of 2025 at a record high, closing September about 5% higher at roughly $114,000. This performance defied expectations of seasonal weakness, as September has historically been a challenging month for Bitcoin. Historical data indicates that positive September closes often precede substantial gains in the final quarter, with rallies averaging over 50% in years such as 2015, 2016, 2023, and 2024. The increasing popularity of both Bitcoin and gold underscores deeper economic anxieties, including persistent inflation worries, ballooning government deficits, and a diminishing confidence in central bank independence. In emerging markets, where currency depreciation is more pronounced, the appeal of scarce assets has intensified.

It is important to note that JPMorgan's $165,000 projection for Bitcoin is a theoretical exercise, illustrating the price point required for Bitcoin to achieve parity with gold when volatility is factored in, rather than a direct prediction. Nonetheless, the expanding ecosystem of Bitcoin ETFs, improved custody solutions, and growing institutional trading activity are solidifying its role as a portfolio hedge, making it more robust than in prior market cycles. As of Thursday morning, Bitcoin was trading near $120,000, which is still approximately $45,000 below the level suggested by JPMorgan's model.