Bitcoin Has “Significant Upside” to $170K, JPMorgan Tells Clients

Core Viewpoint - JPMorgan analysts predict Bitcoin could reach approximately $170,000 within six to twelve months as the deleveraging phase in perpetual futures appears complete and Bitcoin's volatility ratio compared to gold improves [1][3][6] Group 1: Market Dynamics - The crypto market experienced a nearly 20% correction from recent peaks following record liquidations in perpetual futures on October 10, marking the largest in crypto history, with additional smaller liquidations occurring on November 3 due to a $128 million exploit [2][3] - Analysts concluded that the deleveraging phase in perpetual futures has largely ended, with the ratio of open interest in Bitcoin perpetual futures to market capitalization returning to historical norms [3][4] - Perpetual futures are identified as the most critical instruments to monitor in the current market environment, indicating that recent stabilization suggests the deleveraging process is likely behind [4][5] Group 2: Investment Appeal - Rising gold volatility has made Bitcoin more attractive to investors on a risk-adjusted basis, with the Bitcoin-to-gold volatility ratio falling below 2.0, indicating Bitcoin consumes about 1.8 times more risk capital than gold [6] - Analysts estimate that Bitcoin's current market capitalization of approximately $2.1 trillion would need to increase by nearly 67% to align with the total private-sector investment in gold, which is around $6.2 trillion [6][7] - This analysis suggests a significant upside potential for Bitcoin over the next 6-12 months, as it currently trades about $68,000 below JPMorgan's volatility-adjusted fair value relative to gold [7]