JP Morgan believes Bitcoin is undervalued against gold and sets a target of $170,000

While bitcoin has just fallen below $100,000, JP Morgan is relaunching the debate on the valuation of the flagship asset. In a document published on Wednesday, the American bank estimates that BTC is significantly undervalued compared to gold. In his eyes, the fair price of bitcoin would be around $170,000. This analysis revives the debate on the real valuation of the asset, in a context of increased volatility and a market in search of direction.

JP Morgan sees bitcoin undervalued against gold: towards a potential of 170,000 dollars?

In a note to clients on Wednesday, November 6, JP Morgan surprised the market with a bold projection. Bitcoin would be largely undervalued compared to gold, according to a comparative approach based on volatility, despite a correlation which reached 0.85.

Specifically, the bank explains that the BTC/gold volatility ratio has fallen to 1.8, meaning that bitcoin is considered 1.8 times riskier than gold. By applying this ratio to the relative valuation of the two assets, analysts believe that there is significant mechanical room for progress for BTC.

“Taking into account this ratio, which implies that bitcoin currently consumes 1.8 times more capital at risk than gold, then mechanically, the bitcoin market capitalization at $2.1 trillion is expected to grow by almost 67%, implying a theoretical price close to $170,000”can we read in the report.

This analysis is based on a quantitative methodology specific to the bank and based on market dynamics between so-called safe haven assets. In support of its reasoning, JP Morgan highlights several observations:

• Gold's historic rally in October led to an increase in its own volatility, making it temporarily riskier than usual;

• The BTC/gold volatility ratio, which fell to 1.8, makes bitcoin appear relatively more stable than expected in view of the evolution of gold;

• The risk-adjusted valuation of BTC should theoretically reflect this dynamic, hence the projected target of $170,000 within 6 to 12 months;

• The model used is based on a mechanical approach, without integrating speculative or narrative elements around bitcoin, which according to JP Morgan reinforces the robustness of this estimate.

For the American bank, this configuration creates a window of strategic opportunity for investors looking for uncorrelated and rationally valued assets.

Divergent perspectives: when other players scale back their ambitions

Faced with this optimistic reading, several market players display a completely different diagnosis. On the same day that JP Morgan's report was released, bitcoin fell below $100,000, breaking major psychological support for the first time in four months.

This decline is interpreted by some as a signal of persistent vulnerability. In the process, Galaxy Digital announced a downward revision of its price projections for BTC at the end of the year, lowering its target from $185,000 to $120,000.

To justify this readjustment, the firm cites several factors: persistent macroeconomic pressure, notably trade tensions and tariff policies, as well as the crash of October 10, considered the largest liquidation episode in 24 hours in the history of cryptos.

Added to this is worrying data: according to Galaxy, nearly 400,000 BTC were dumped on the market by whales in October, helping to increase selling pressure. This movement of capital is part of a general trend of repositioning by institutional investors, who now seem to be diversifying their exposures towards other assets or competing themes.

“Bitcoin has entered a new phase, what we call the era of maturity” explains Alex Thorn, head of research at Galaxy. He believes that ETFs, by absorbing a growing share of liquidity, are now slowing the pace of increases.

This divergence of interpretation between JP Morgan and other institutions like Galaxy illustrates the current complexity of the crypto market. While some see this as a medium-term structural opportunity, others favor a more cautious reading, based on immediate market data. For investors, the challenge now lies in the trade-off between these two narratives: that of an undervalued asset ready to rebound, and that of a market in transition towards more moderate growth. In all cases, these divergences underline that the price of BTC is no longer limited to the logic of a bubble or speculative exuberance: it becomes an asset analyzed, compared, and scrutinized using classic financial methodologies.