- JPMorgan expects Bitcoin could reach around $170K within 6–12 months as leverage resets.
- October’s 20% crash was fueled by record futures liquidations and the Balancer exploit.
- Analysts say BTC is undervalued versus gold and could see a 67% upside from current levels.
JPMorgan analysts say Bitcoin (BTC) could climb to around $170,000 within the next six to twelve months as market leverage resets and its volatility relative to gold improves. The outlook, published in a Wednesday report and led by Nikolaos Panigirtzoglou, suggests that the recent correction has cleared excess leverage and set the stage for renewed upside.
Record Liquidations Drove October’s Crash
According to JPMorgan, the crypto market corrected by nearly 20% from its highs, with the sharpest drop occurring on October 10, when Bitcoin plunged amid the largest liquidation event in perpetual futures history. A smaller wave followed on November 3, linked to the $120 million Balancer exploit in the decentralized finance (DeFi) space. The incident reignited investor anxiety over protocol security and fueled further selloffs.
The analysts noted that these back-to-back liquidations were largely driven by excessive leverage in derivatives markets. However, they believe the worst is now over, with open interest ratios in Bitcoin perpetual futures falling from above-average levels back to historical norms. Ethereum markets show similar trends, though the deleveraging there has been less severe.
Futures Stabilizing, Market Reset Underway
“In CME futures, the opposite is true; there have been more liquidations in Ethereum than Bitcoin futures,” the analysts wrote. They added that ETF redemptions in recent weeks were modest compared to the inflows seen in early October, a sign that institutional interest remains largely intact.
“Overall, we believe that perpetual futures are the most important instruments to watch in the current juncture,” the team said. “The message from the recent stabilization is that deleveraging in perpetual futures is likely behind us.”
With futures markets calming, JPMorgan suggests Bitcoin could regain upward momentum as volatility stabilizes and risk appetite returns.
Bitcoin Undervalued Relative to Gold
JPMorgan also pointed out that Bitcoin’s volatility-adjusted performance now looks stronger relative to gold. The bitcoin-to-gold volatility ratio has fallen below 2.0, meaning Bitcoin consumes about 1.8 times more risk capital than gold. Based on this metric, the analysts estimate Bitcoin’s market capitalization of $2.1 trillion would need to rise roughly 67% — implying a theoretical BTC price near $170,000 — to align with the $6.2 trillion private-sector investment in gold through ETFs and physical holdings.
At present, Bitcoin trades around $103,000, roughly $68,000 below JPMorgan’s volatility-adjusted “fair value” relative to gold. The report concludes that this “mechanical exercise implies significant upside for Bitcoin over the next 6–12 months.”
Long-Term View: Gradual Convergence Toward Gold
This isn’t the first time JPMorgan has made a bullish comparison between Bitcoin and gold. In August, analysts projected a $126,000 target, and by October, Bitcoin had already touched $126,200 before the record futures liquidation event. A previous November report estimated upside toward $165,000 by year-end, reinforcing the bank’s view that Bitcoin continues to trend toward parity with gold’s capital footprint.
