Why does JPMorgan believe Bitcoin is undervalued compared to gold?
JPMorgan Claims Bitcoin is “Undervalued by $68K” Compared to Gold as BTC and Stocks Slide Again
Bitcoin’s latest pullback alongside equities has reignited the “digital gold” debate. In a widely cited research note, JPMorgan strategists argue Bitcoin is undervalued by roughly $68,000 when benchmarked against gold, implying a substantial upside if BTC’s store-of-value role converges with gold’s. Here’s what that means, how the bank likely arrived at the figure, and what crypto-native investors should watch next.
Bitcoin vs. Gold: How JPMorgan Frames the $68K “Undervaluation”
JPMorgan has long used gold as a reference for Bitcoin’s potential market share as a macro hedge and store of value. The “undervalued by $68K” claim stems from comparing Bitcoin’s current market value to a gold-based target.
Two valuation lenses JPMorgan uses
- Gold-parity framework (long-term): Compare BTC’s market cap to the value of “investable gold” held by private investors (bars, coins, ETFs), often estimated in the low-to-mid trillions of dollars. If BTC were to capture a material share of that pie, the implied per-coin price rises substantially given the fixed, scarce supply.
- Volatility-adjusted fair value (medium-term): Because BTC is far more volatile than gold, JPMorgan scales the “fair” BTC market share of gold downward to equalize risk. This often produces a lower fair value than pure gold-parity, but still above spot during risk-off episodes.
In practice, the bank’s analysts triangulate across these methods. When they say BTC is “undervalued by $68K,” they’re signaling a sizable gap between current spot and the price implied by their gold-based models-largely a function of BTC’s constrained supply, ongoing institutional adoption (including spot ETFs), and the durability of the store-of-value narrative.
Key Differences Between Bitcoin and Gold (2025 Snapshot)
Understanding where the models come from requires a quick look at fundamentals.
| Metric | Bitcoin (BTC) | Gold |
|---|---|---|
| Circulating supply | ~19.7M BTC | ~208,000+ tonnes above-ground |
| Annual issuance (2025) | ~0.8-1.0% post-2024 halving | ~1.5-2.0% mine supply growth |
| Market value | ~$1.0-$1.5T range in 2024-2025 | ~$14-16T total; “investable” ~low-to-mid $T |
| Typical volatility | High (significantly above gold) | Low-to-moderate |
| Core use case | Digital, scarce store-of-value; programmable collateral | Physical store-of-value; jewelry, central bank reserves |
The takeaway: Bitcoin’s supply is harder-capped and currently grows more slowly than gold’s, but BTC’s higher volatility and shorter track record keep risk budgets conservative-hence the “volatility-adjusted” discount JPMorgan often applies.
BTC and Stocks Slide Again: What’s Driving the Risk-Off?
Recent weakness in BTC and equities reflects familiar macro and market microstructure forces:
- Higher real yields and a stronger dollar weigh on risk assets, including crypto.
- ETF flow fatigue or net outflows after strong inflow streaks can amplify downside.
- Leverage resets: Perpetual funding and basis compress during selloffs, triggering liquidations.
- Miner and treasury selling: Post-halving cash-flow needs or balance-sheet rebalancing can add supply.
- Event risk: Geopolitics and policy headlines periodically spike risk premia.
These episodes don’t invalidate the long-term gold-parity thesis, but they do remind investors that path dependency matters. BTC can be “undervalued” structurally while still trading lower tactically when liquidity and risk appetite tighten.
What JPMorgan’s Call Means for Crypto Investors and Builders
For investors
- Separate long-term thesis from short-term tape: A gold-based upside gap can coexist with near-term downside if real rates rise or ETF flows stall.
- Watch three dials:
- Real yields and USD trend: Macro headwinds/tailwinds for all stores of value.
- Spot ETF net flows and secondary-market premiums/discounts: Signals of institutional demand.
- Volatility regime: Lower realized vol strengthens the volatility-adjusted fair value over time.
- Risk management: Consider staged entries, options collars, or basis trades rather than binary timing.
For web3 builders
- On-chain liquidity and UX: Sustained institutional adoption favors better fiat rails, custody, and compliance tooling.
- Bitcoin layer-2s and programmability: Activity that drives sustainable fee markets can strengthen the store-of-value narrative without over-relying on speculative cycles.
- Interoperability: Institutional portfolios increasingly span BTC, ETH, and tokenized assets-optimize for multi-chain access and reporting.
Risks and What Could Invalidate the $68K Gap
- Persistent high volatility: If BTC’s volatility stays elevated relative to gold, fair value under volatility-adjusted models remains lower.
- Regulatory shocks: Adverse rulings, taxation changes, or ETF constraints could compress institutional demand.
- Macro regime shift: A pronounced drop in inflation risk or a surge in real yields can reduce demand for stores of value broadly, not just BTC.
- Narrative competition: If gold gains share due to central bank buying while BTC adoption slows, the “parity” path takes longer.
Bottom Line
JPMorgan’s “undervalued by $68K” claim underscores a durable theme: if Bitcoin continues to encroach on gold’s store-of-value role, spot prices have room to converge toward a higher, gold-referenced equilibrium. Still, the road is paved with macro cycles, ETF flow dynamics, and volatility regimes that can pull BTC below fair value for stretches of time. For crypto-native investors, the edge lies in tracking those dials, sizing with respect to volatility, and letting the structural thesis play out while managing the tactical tape.
