According to a new study from JPMorgan, Bitcoin can be undervalued compared to gold. JPMorgan says that if so-called “Dependency Trade” continues to gain momentum, the world’s biggest cryptocurrency has a “significant reverse.”
Bank analysts estimate that Bitcoin could reach $165,000 (approximately 40% above its current level) based on a volatility-adjusted comparison with gold. The calculations reflect the amount of capital needed to hold Bitcoin and gold, and come when demand for both assets is surged.
“The sharp rise in gold prices over the past month has made Bitcoin more attractive to investors compared to gold, especially as the volatility ratio between Bitcoin and gold continues to fall below 2.0,” the analyst wrote.
JPMorgan’s mathematics means that Bitcoin’s market capitalization is $2.3 trillion, which should rise nearly 42% to the $6 trillion invested in gold bars, coins and ETFs when adjusted for relative risk.
Bitcoin closed its third quarter of 2025 at a record high, promoting investors’ belief that Bitcoin’s price will rise further in the final quarter of this year.
Bitcoin rose about 5% in September to close at around $114,000, opposing expectations of seasonal debilitating. September was often a difficult month for Bitcoin, but when it ended higher, the final quarter tended to bring about large profits.
Data shows that positive closures in September have been followed by fourth quarter rallies, averaged over 50%, over the years, including 2015, 2016, 2023 and 2024.
Bitcoin’s decline trade
The forecast highlights investors’ changes in assets that are considered hedges against devaluation of Fiat currency. The strategy, known as debasement, has seen money poured into both Bitcoin and Gold Exchange Funds (ETFs) over the past year.
Retail investors are leading the rates, influxing Bitcoin ETFs, which were above gold, into the spot in early 2025.
However, the gold inflow has been caught up in August as fiscal and fiscal tensions renewed interest in the yellow metal.
The growing popularity of Bitcoin and gold reflects deeper economic unrest. With prolonged concerns about inflation, government deficits and shaking confidence in central bank independence, many investors are rethinking their trust in Fiat’s money.
Emerging markets where currency depreciation is more prominent, the appeal of holding rare assets has become stronger.
JPMorgan does not necessarily predict that Bitcoin will reach $165,000. Instead, it’s a theoretical exercise that shows where Bitcoin is to match gold when adjusting volatility.
Still, with more ETFs, custody options and institutional transactions, Bitcoin’s role as a portfolio hedge appears to be stronger than in previous cycles. As of Thursday morning, Bitcoin was trading at nearly $120,000. This is about $45,000 more than the approximately $45,000 that JPMorgan’s model suggests should be.