Bitcoin is currently undervalued relative to gold, with investment bank JPMorgan Chase estimating its fair value at approximately $126,000.
The bank’s assessment is based on a sharp decline in Bitcoin’s volatility, which has dropped from nearly 60% at the beginning of the year to around 30%, the lowest level ever recorded. This has narrowed the volatility gap with gold to just 2.0, meaning Bitcoin now requires only double the risk capital compared to gold—its closest alignment in decades.
On a volatility-adjusted basis, analysts calculate that Bitcoin’s market capitalization would need to rise by roughly 13% to mirror the private investment that gold commands, estimated at about $5 trillion. Such an adjustment places Bitcoin’s fair value near the $126,000 mark per coin.
Adding strength to this outlook is the growing role of institutional and corporate investment in Bitcoin. Corporate treasuries now hold over 6% of the total Bitcoin supply, a dynamic similar to central banks’ bond purchases during periods of quantitative easing. This has helped stabilize the asset and reduce its price fluctuations.
Further, Bitcoin’s inclusion in major equity indices and adoption by large firms holding it as a reserve asset have increased passive investment flows. These developments have enhanced Bitcoin’s standing as a maturing financial instrument and boosted its credibility as a long-term store of value.
According to JPMorgan, the convergence of Bitcoin’s risk-return profile with that of gold highlights its transition from a speculative asset to a viable investment alternative for institutional portfolios. The bank argues that as volatility continues to decline and adoption widens, Bitcoin could assume a role similar to that of gold in the global financial system.
As of early September, Bitcoin remains about $16,000 below its calculated fair value, supporting the view that it is still undervalued when measured against gold. Analysts suggest this gap provides room for potential upside if investor confidence continues to grow.
