Bitcoin undervalued: JPMorgan says BTC $68K below fair value

Bitcoin undervalued is the label JPMorgan analysts have given to the world’s largest cryptocurrency after recent market turbulence. In a new report, the bank claims Bitcoin is trading about $68,000 below what it considers fair value when compared with gold on a volatility-adjusted basis. The analysis comes as Bitcoin prices and global equities face renewed pressure amid cautious investor sentiment and macroeconomic uncertainty.

The chart below from CoinMarketCap illustrates Bitcoin’s price movement over the past month, highlighting the volatility that underpins JPMorgan’s valuation perspective. After reaching local highs earlier in the period, BTC faced steady selling pressure, briefly dipping before attempting to stabilize near current levels. This 30-day snapshot underscores how market sentiment, ETF flows, and macroeconomic indicators have all influenced Bitcoin’s short-term performance, reinforcing the bank’s view that the asset remains undervalued compared to its historical and risk-adjusted relationship with gold.

Why JPMorgan believes Bitcoin undervalued versus gold

According to Nikolaos Panigirtzoglou, lead analyst at JPMorgan, the recent correction has made Bitcoin undervalued relative to gold for the first time in months. The report compares the total private investment value in both assets, noting that gold’s private-sector holdings are valued around $6.2 trillion, while Bitcoin’s market capitalization sits near $2.1 trillion.

Based on Bitcoin’s historical volatility ratio compared to gold, JPMorgan estimates that Bitcoin would need to rise roughly 67 percent to achieve parity on a risk-adjusted basis. This would place its fair value around $170,000 per coin. The bank’s models show that at the end of last year, Bitcoin was actually $36,000 above its fair value, but after sharp declines, the tables have turned.

Panigirtzoglou’s note points out that this swing indicates how quickly relative valuations can shift as volatility and investor positioning evolve. He adds that the reduction in leveraged positions across futures markets has also restored balance, reducing excess risk that inflated prices earlier in the year.

Market context behind the Bitcoin undervalued call

The backdrop for this reassessment is a global pullback in risk assets. Bitcoin fell under $102,000 during a recent session, marking one of its steepest weekly declines in months. Analysts link the drop to disappointing U.S. employment data and a broader loss of confidence in high-risk assets.

According to data from Challenger, Gray & Christmas, U.S. employers announced over 153,000 job cuts in October, the highest monthly total since 2003. The surprising number heightened fears that the economy may be softening faster than expected, triggering declines in both equities and cryptocurrencies.

Adding to the pressure, U.S. spot Bitcoin exchange-traded funds recorded nearly $900 million in net outflows in just three trading days. This indicates that institutional investors, who were major buyers during Bitcoin’s run-up earlier in the year, are currently taking profits or reallocating funds amid uncertainty.

Meanwhile, Federal Reserve policy expectations continue to influence market sentiment. While investors are pricing a roughly 69 percent chance of a rate cut by December, any delay could keep monetary conditions tight, suppressing demand for speculative assets. Bitcoin’s correlation with equities means it remains vulnerable to shifts in risk appetite.

What the Bitcoin undervalued thesis implies

If JPMorgan’s assessment proves correct, Bitcoin may have significant upside potential over the medium term. The bank’s research implies that current prices underestimate the asset’s relative value compared to gold, especially if volatility remains contained and institutional adoption resumes.

The comparison also highlights how Bitcoin is increasingly being evaluated through the same lens as traditional assets. By using gold as a benchmark, JPMorgan effectively treats Bitcoin as a digital store of value competing for the same investor capital. This framing lends more legitimacy to Bitcoin’s role in diversified portfolios.

However, the bank’s analysts caution that their valuation model is not a prediction of near-term price action. The fair-value estimate is mechanical and based on risk metrics, not on immediate market drivers such as liquidity or momentum. Panigirtzoglou notes that future gains will depend heavily on whether the crypto market stabilizes and institutional inflows return.

Risks and limitations to the Bitcoin undervalued argument

Despite the upbeat model, several risks remain. Bitcoin’s performance continues to hinge on overall risk sentiment. If global markets face further stress, whether from slowing growth, geopolitical shocks, or policy surprises, cryptocurrencies could see more downside pressure.

Another concern is the recent trend of outflows from spot Bitcoin ETFs. These vehicles had been instrumental in driving adoption earlier in the year. Sustained withdrawals could signal waning institutional interest, limiting Bitcoin’s ability to recover quickly even if it appears undervalued statistically.

There’s also the challenge of comparing Bitcoin to gold. While both are viewed as stores of value, gold has millennia of history and broad central bank ownership. Bitcoin’s track record, by contrast, spans just over a decade. As a result, some analysts question whether direct comparisons are fully valid, especially when considering regulatory uncertainty, technological risks, and changing investor behavior.

Finally, market volatility remains a critical factor. Although Bitcoin’s volatility relative to gold has decreased, it still trades with roughly 1.8 times the risk of the metal. That elevated risk means valuation models can shift dramatically with each swing in price.

What could confirm JPMorgan’s view that Bitcoin undervalued

Traders and analysts looking to test JPMorgan’s thesis should watch a few indicators closely. Renewed inflows into Bitcoin ETFs or other institutional products would strengthen the case that investors are beginning to view Bitcoin as underpriced. Likewise, stable or declining volatility would make the bank’s risk-adjusted valuation more credible.

Changes in global liquidity and central-bank policy will also play a crucial role. A shift toward easier monetary conditions would likely support both gold and Bitcoin as alternative assets. Conversely, any reacceleration in inflation or tightening could delay recovery in risk markets.

Finally, maintaining the Bitcoin-to-gold volatility ratio near its current level would keep JPMorgan’s fair-value model intact. If Bitcoin’s volatility spikes again, the comparison would need recalibration and the implied fair value could drop.

Conclusion

In conclusion, JPMorgan’s assertion that Bitcoin undervalued compared to gold marks a notable change in tone from a traditionally cautious institution. The bank’s research suggests Bitcoin could be worth around $170,000 per coin if it were to trade on equal footing with gold in risk-adjusted terms.

While the current macro environment remains challenging, this assessment adds a fresh dimension to the Bitcoin narrative, one that sees it less as a speculative gamble and more as a maturing alternative asset with measurable intrinsic value. Whether markets agree with that valuation will depend on how investors, institutions, and policymakers react in the months ahead.

For now, the “Bitcoin undervalued” argument underscores that even in turbulent times, traditional finance is paying closer attention to how digital assets fit into the broader investment landscape.

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