Written by: BitpushNews
"Bitcoin's volatility has dropped to a historic low, making it more attractive than gold in the eyes of institutional investors," JPMorgan stated bluntly in its latest research report. The Wall Street giant has made it clear that bitcoin is significantly undervalued compared to gold.
According to JPMorgan's analysis, bitcoin's six-month rolling volatility has plummeted from nearly 60% at the beginning of the year to about 30%, reaching a historic low. Meanwhile, the volatility ratio between bitcoin and gold has also dropped to its lowest level ever, with bitcoin now only twice as volatile as gold.
Volatility Plummets, Value Reassessment Underway
Volatility has always been a major obstacle preventing traditional institutional investors from fully embracing bitcoin. Now, this barrier is rapidly disappearing. JPMorgan's analyst team elaborated on this shift in their latest report.
The sharp decline in bitcoin's volatility is not just a technical indicator change, but also represents a significant increase in market maturity. The report points out that the drop in volatility directly reflects a shift in bitcoin's investor base—from being dominated by retail investors to being led by institutions.
This shift is similar to the way central bank quantitative easing smooths out bond volatility. Corporate treasuries are playing a role akin to a "bitcoin central bank," continuously buying and holding, which reduces the circulating supply in the market and thus lowers price fluctuations.
JPMorgan used a volatility-adjusted model to make a detailed comparison between bitcoin and gold. The analysis shows that bitcoin's market cap needs to rise by 13% to match the $5 trillion value of gold in the private investment sector. This calculation puts bitcoin's fair value at about $126,000, leaving considerable room for growth compared to current prices.
ETF Battle: An Unprecedented Capital Migration
If the decline in volatility is an internal sign of bitcoin's maturity, then the approval and issuance of spot bitcoin ETFs is an external catalyst accelerating institutional adoption. This milestone event has opened up unprecedented investment channels for both retail and institutional investors, directly triggering an "assets under management (AUM)" competition between bitcoin and gold.
According to the latest data from Bespoke Investment Group, bitcoin funds' AUM has reached about $150 billion, while gold funds' AUM stands at about $180 billion. The gap between the two has narrowed to just $30 billion, showing an astonishing pace of catch-up.
On the specific fund level, the world's largest gold ETF, SPDR Gold Shares (GLD), holds about $104.16 billion in assets, while the leading bitcoin ETFs (such as BlackRock's IBIT) have accumulated about $82.68 billion in just one year. This not only reflects a shift in investment preferences but also confirms bitcoin's growing importance as a component of global asset allocation.
JPMorgan analysts believe: "Bitcoin is becoming increasingly attractive, especially for institutional portfolios. The decline in volatility, combined with greater regulatory clarity, has created a perfect environment for adoption."
Technical Outlook
After JPMorgan released its report, bitcoin's price saw a slight rebound but then pulled back. According to TradingView data, as of the time of writing, bitcoin rose as much as 2.3% on the day to about $113,479, before retreating about 1% to around $112,272.
Veteran trader Peter Brandt believes that although bitcoin has recently rebounded, to completely shake off the medium-term bearish sentiment, the price must break through the key resistance level of $117,570.
However, from a longer-term perspective, multiple technical indicators still point to a bullish outlook. Bitcoin's ability to hold above $110,000 suggests that institutional investors are steadily building positions during each pullback, accumulating momentum for a potential upward move in the coming months.
The $126,000 target proposed by JPMorgan may just be a new starting point. If bitcoin continues to attract institutional capital at its current pace, the narrative of "digital gold" surpassing traditional gold may no longer be just a theoretical projection, but could gradually become reality.
