Big investors will get more comfortable buying bitcoin, says JPMorgan
Bitcoin’s volatility has collapsed from 60% at the start of 2025 to about 30% — which could make the crypto asset more appealing to institutional investors once put off by its rollercoaster price swings, according to JPMorgan. “Expect that the allocations to bitcoin by institutional investors could match those of competing assets classes such as gold if there is convergence in volatilities,” strategist Nikolaos Panigirtzoglou said in a note Thursday. “A significant convergence in volatilities between bitcoin and gold has been taking place over the past year” and is now “the lowest on record.” A contributing factor has been the “intense withdrawal of bitcoins by corporate treasurers over the past year,” Panigirtzoglou said, which “acted as a suppressor of volatility, as a rising share of bitcoins has been withdrawn into passive holdings.” BTC.CM= YTD mountain Bitcoin year-to-date chart MicroStrategy copycats now hold more than 6% of the bitcoin supply and are gaining traction with their inclusion in global equity indices, Panigirtzoglou highlighted. Bitcoin treasury purchases are “helping to make bitcoin more attractive from a valuation point of view,” the note said. “The reason is that, for most institutional investors, the volatility of each class matters in terms of portfolio risk management and the higher the volatility of an asset class, the higher the risk capital consumed by this asset class.” He explained that at bitcoin’s current market cap of $2.2 trillion, the digital currency would have to increase 13% – to about $126,000. That’s slightly above the record it set last weekend and would match gold’s $5 trillion of private sector investment “on a volatility-adjusted basis.” “The gap between the bitcoin price and our volatility-adjusted comparison to gold shifted from highly positive territory at the end of 2024” when the cryptocurrency was about $36,000 to high “to negative territory currently,” where bitcoin’s price is about $16,000 too low. “This points to some upside potential for bitcoin currently,” Panigirtzoglou said. Bitcoin on Thursday traded about 10% below the record high set earlier this month.
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