TLDR
- JPMorgan sees Bitcoin potentially reaching $165K, driven by retail demand and its undervaluation relative to gold.
-
Bitcoin’s price is estimated to rise 40% to match gold’s market scale, according to JPMorgan analysts.
-
The “debasement trade” has led retail investors to heavily invest in both Bitcoin and gold ETFs.
-
Bitcoin’s volatility ratio to gold has fallen, making Bitcoin more attractive as a store of value.
Bitcoin (BTC) could soar to $165,000 by the end of 2025, according to analysts at JPMorgan. This projection comes as the world’s largest cryptocurrency continues to gain traction among retail investors, particularly in the context of the “debasement trade.” The bank’s analysis suggests that Bitcoin is currently undervalued when compared to gold, providing a compelling case for potential upside.
JPMorgan’s forecast is based on a volatility-adjusted comparison between Bitcoin and gold. As of the latest data, the bitcoin-to-gold volatility ratio has dropped below 2.0, meaning Bitcoin now consumes 1.85 times more risk capital than gold. This ratio signals that Bitcoin’s market cap should rise by about 42% to match the private investment levels in gold, suggesting a Bitcoin price of $165,000.
Retail Investors Drive the Debasement Trade; JPMorgan
The growing interest in Bitcoin and gold exchange-traded funds (ETFs) is largely driven by retail investors, according to JPMorgan’s analysts. Since late 2024, these investors have been flocking to alternative assets such as Bitcoin and gold to hedge against the devaluation of fiat currencies. This trend is driven by inflation fears, concerns over government deficits, and geopolitical risks.
JPMorgan’s analysts noted that Bitcoin ETFs initially outpaced gold ETFs earlier in 2025, with retail investors leading the charge. However, gold ETF inflows have picked up in recent months, narrowing the gap between the two. Despite this, Bitcoin remains a more attractive investment in relative terms, especially with its volatility ratio to gold now at historically low levels.
The analysts also highlighted the growing participation of institutional investors through CME futures, though their activity has been slower than that of retail investors. Bitcoin’s attractiveness is further amplified by the recent surge in gold prices, which have made Bitcoin more appealing to investors seeking a store of value.
Upside for Bitcoin in the Current Market
The analysts at JPMorgan believe that Bitcoin’s current price of approximately $119,000 is significantly undervalued compared to gold, with a $50,000 gap between its current market price and where it theoretically should be based on the bank’s volatility-adjusted model. The model suggests that Bitcoin would need to rise by about 40% to reach $165,000 and match the $6 trillion of private investment in gold.
This price target is not only based on Bitcoin’s potential to match gold’s private investment but also reflects the broader economic conditions driving the demand for Bitcoin as a store of value. The debasement trade has fueled increased demand for both Bitcoin and gold as hedges against inflation, currency devaluation, and political instability.
JPMorgan’s revised Bitcoin target of $165,000 comes after the success of Bitcoin and gold ETFs, which have seen a surge in retail inflows. The bank’s model anticipates that Bitcoin’s price will continue to rise as retail investors and institutions alike seek alternative assets to protect their wealth.
Bitcoin’s Volatility Makes it a Strong Hedge
JPMorgan’s analysis also noted that Bitcoin’s volatility has been in a favorable range compared to gold, making it a more attractive investment for those seeking a hedge against inflation. As Bitcoin’s volatility ratio has declined, it becomes more appealing to investors who are looking for assets that can withstand economic uncertainty.
Retail investors have increasingly viewed Bitcoin as a store of value, especially with concerns surrounding the devaluation of fiat currencies and the growing instability in global financial markets. The surge in Bitcoin ETF inflows indicates a shift in the market, with more individuals seeking exposure to Bitcoin without the complexities of directly purchasing and storing the cryptocurrency.
