• JPMorgan analysts stated that Bitcoin could hit $165,000 by year's end based on volatility-adjusted comparisons with gold.
• The analysts added that Bitcoin is undervalued compared to gold and possesses significant upside potential.
• Bitcoin's market cap would need to rise 42% on a volatility-adjusted basis to match the $6 trillion of private investments in gold.

Bitcoin (BTC) would need to rise about 42% on a volatility-adjusted basis to match gold, with the debasement trade seen as a key driver of further upside, according to JPMorgan analysts.

JPMorgan sees Bitcoin as undervalued compared to gold, with potential to hit $165,000

In a note on Wednesday, JPMorgan analysts stated that Bitcoin could reach about $165,000 by year-end, highlighting that the cryptocurrency is undervalued relative to gold on a volatility-adjusted basis.

The analysts, led by Nikolaos Panigirtzoglou, noted that the "debasement trade," which involves investors buying assets like Bitcoin or gold as a hedge against the devaluation of fiat currencies, could serve as upside momentum for BTC.

Panigirtzoglou pointed out that the bitcoin-to-gold volatility ratio has dropped below 2.0, meaning Bitcoin now consumes about 1.85 times more risk capital than gold, the lowest level seen in years.

"The steep rise in the gold price over the past month has made Bitcoin more attractive to investors relative to gold, especially as the Bitcoin to gold volatility ratio keeps drifting lower to below 2.0," the report states.

JP Morgan analysts added that Bitcoin's market cap would need to rise by approximately 42% on a volatility-adjusted basis to match the approximately $6 trillion that private investors hold in gold through ETFs, bars, and coins.

The bank also noted that retail investors have been driving Bitcoin demand, with inflows into spot Bitcoin ETFs surpassing those of gold earlier in 2025. However, gold regained momentum in August, as geopolitical tensions and worries over fiscal deficits revived appetite for the metal.

The report reflects growing sentiment in the top crypto, which reclaimed $120,000 on Thursday after over a month of trading sideways. The renewed momentum can be attributed to rising optimism for an October rally, with Bitcoin-related search interest across social media platforms climbing 34% this week, per LunarCrush data.

Bitcoin ETFs have also posted notable inflows this week, offsetting last week's net outflows as investors restore buying momentum.

JPMorgan's projection adds to a growing list of bullish year-end forecasts for Bitcoin, with several firms, including Bernstein and Standard Chartered, setting price targets near $200,000.