Bitcoin's Volatility Advantage Over Gold
Bitcoin is trading below its fair value compared to gold when adjusted for volatility, according to analysts at JPMorgan. The bank’s report highlights that gold’s rally to record highs in October brought a rise in volatility, making the precious metal riskier and Bitcoin “more attractive to investors.”
The bitcoin-to-gold volatility ratio has dropped to 1.8, meaning Bitcoin carries roughly 1.8 times the risk of gold. JPMorgan analysts said, “By taking into account this volatility ratio, which implies that bitcoin currently consumes 1.8 times more risk capital than gold, then mechanically, the market cap of bitcoin at $2.1 trillion currently would have to rise by close to 67%, implying a theoretical bitcoin price of close to $170,000.” They added that this “mechanical exercise thus implies significant upside for Bitcoin over the next 6–12 months.”
Bitcoin Forecasts Turn Bearish Despite Theoretical Upside
While JPMorgan’s model suggests Bitcoin could surge, many analysts have recently reduced their expectations for the leading cryptocurrency. Bitcoin’s drop below $100,000 this week marked the first breach of that level in four months, shaking investor confidence and triggering further bearish outlooks.
Some analysts now expect Bitcoin will struggle to reclaim $125,000 by the end of 2025, citing macroeconomic headwinds, including trade tariffs and the October 10 market crash, which triggered the largest 24-hour liquidation event in crypto history.
Institutional Dynamics Slowing Growth
Galaxy, a leading digital asset investment firm, cut its 2025 Bitcoin forecast from $185,000 to $120,000 on Wednesday. The firm cited a series of bearish pressures, including major holders — or whales — selling roughly 400,000 BTC in October and a shift of investor interest toward other assets and narratives.
Alex Thorn, Galaxy’s head of firmwide research, said, “Bitcoin has entered a new phase, what we call the ‘maturity era,’ in which institutional absorption, passive flows, and lower volatility dominate.” He added that exchange-traded funds (ETFs) continue to absorb large amounts of market liquidity, slowing down price momentum compared to previous bull markets.
Market Volatility Keeps Investors on Edge
Bitcoin’s dip below the 365-day moving average has added to market caution, with many traders reassessing their exposure to risk assets. Despite the optimistic projections from JPMorgan’s volatility-adjusted analysis, near-term uncertainty remains high as investors weigh geopolitical tensions, shifting interest rate expectations, and profit-taking by large holders.
The contrasting views between traditional banking institutions and crypto-native firms highlight the broader divide in sentiment surrounding Bitcoin’s path forward — whether it’s poised for another major rally or entering a prolonged consolidation phase.