Increased stability of Bitcoin could Entice Large-Scale Investors to Re-enter the Market, According to JPMorgan
In a recent analysis, JPMorgan strategist Nikolaos Panigirtzoglou has suggested that Bitcoin's lower volatility could attract more institutional investors. This prediction comes as the volatility of Bitcoin has dropped significantly, from 60% in 2024 to 30% in 2025.
This decrease in volatility has had a noticeable effect on the market. With fewer coins in circulation due to a significant withdrawal by corporate treasurers over the past year, there has been less trading, less panic selling, and less hype buying. As a result, the price of Bitcoin is currently around 10% lower than its recent all-time high.
However, this trend could change soon. According to Panigirtzoglou, the current gap between Bitcoin's price and a volatility-adjusted comparison to gold indicates upside potential for Bitcoin. Currently, the price of Bitcoin is approximately $16,000 lower than its volatility-adjusted comparison to gold. If Bitcoin's volatility continues to decrease and approaches the level of gold, it could push the price up to around $126,000.
The trend of corporate treasurers holding Bitcoin and its inclusion in global equity indices is making Bitcoin more attractive from a valuation point of view. In fact, corporate treasurers now hold over 6% of Bitcoin's entire supply. This increased interest from corporate treasurers could signal a shift in the perception of Bitcoin as a viable investment option for institutional investors.
JPMorgan's Panigirtzoglou has also noted that institutional investors are less likely to invest in assets that consume too much risk capital. With Bitcoin's volatility decreasing, it may become a more attractive option for these investors. As lower volatility brings institutional investors back, it could lead to further price increases for Bitcoin.
In a move that could further boost Bitcoin's appeal to institutional investors, Coinbase has launched futures on a new index tied to Apple, Microsoft, Nvidia, Tesla, and BlackRock. This development could make it easier for institutional investors to gain exposure to Bitcoin and other cryptocurrencies, potentially leading to increased investment and further price increases.
In conclusion, the decreasing volatility of Bitcoin, the increasing interest from corporate treasurers, and the launch of new investment products could all contribute to a bullish outlook for Bitcoin's price in the future. As institutional investors become more comfortable with Bitcoin as an investment option, it is possible that we could see the price of Bitcoin approach or even surpass the $126,000 mark in the coming years.
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