Financial powerhouse JPMorgan Chase indicates Bitcoin (BTC) could surge to approximately $165,000 when adjusted for volatility compared to gold, emphasizing substantial growth potential if the "debasement trade" maintains momentum.
According to the Wall Street institution's analytical models, Bitcoin would require a 40% increase from current prices to equal private gold investments after risk adjustments.
The leading cryptocurrency was trading near $119,000 at the time of reporting.
The debasement strategy involves acquiring assets like gold or Bitcoin as protection against fiat currency devaluation.
This projection emerges as retail investors rapidly adopt the debasement approach, significantly increasing investments in both Bitcoin and gold ETFs throughout the previous quarter.
Research led by Nikolaos Panigirtzoglou revealed substantial inflows into these investment products since late 2024, with accelerated activity preceding the U.S. presidential election.
Analysts identified this trend as a reaction to persistent inflation worries, expanding government deficits, concerns about Federal Reserve autonomy, decreasing confidence in fiat currencies across emerging markets, and broader efforts to diversify from U.S. dollar exposure.
JPMorgan reported dramatic increases in cumulative flows into spot Bitcoin and gold ETFs, primarily driven by retail investment activity. Bitcoin ETFs initially outperformed gold products earlier this year, especially following "Liberation Day," though gold ETF investments have been closing the gap since August.
Institutional investors have also engaged in these markets, according to JPMorgan, predominantly through CME Bitcoin and gold futures contracts rather than ETFs. The bank's open interest analysis shows institutions have maintained net buying positions since 2024, though their investment momentum has recently trailed retail participation.
Gold's significant price appreciation over the past month has enhanced Bitcoin's comparative attractiveness, with the Bitcoin-to-gold volatility ratio declining below 2.0. This movement reinforces the bank's assessment that Bitcoin remains undervalued relative to gold, currently trading approximately $50,000 below JPMorgan's model projections.