Bitcoin, often called digital gold, is making waves in the financial world. According to a recent analysis by JPMorgan, Bitcoin’s current price is undervalued, with a potential fair value of $126,000 by the end of 2024. This bold prediction comes as Bitcoin’s volatility drops to historic lows, institutional demand surges, and corporate treasuries scoop up the cryptocurrency. But what does this mean for investors, and can Bitcoin really reach such heights? Let’s dive into the details.
Bitcoin’s Declining Volatility and Gold Comparison
JPMorgan analysts, led by Nikolaos Panigirtzoglou, have noted a significant change in Bitcoin’s behavior. Its volatility, which measures price fluctuations, has dropped from nearly 60% at the start of 2025 to about 30%—a historic low. This makes Bitcoin less risky and more appealing to big investors. The analysts compare Bitcoin to gold, a traditional safe-haven asset. They use a volatility-adjusted ratio, which shows Bitcoin now requires only twice the risk capital of gold in investment portfolios, down from much higher levels in the past.
To match the $5 trillion private gold market, Bitcoin’s $2.2 trillion market cap would need to grow by about 13%, pushing its price to around $126,000. At the time of the report on August 28, 2025, Bitcoin was trading at $113,170, roughly $13,000 below this fair value, suggesting room for growth. This undervaluation, combined with lower volatility, strengthens Bitcoin’s case as a legitimate asset for institutional portfolios.
Institutional and Corporate Demand Fuels Growth
One of the biggest drivers of Bitcoin’s potential is the growing interest from institutions and corporations. Corporate treasuries, like those of Strategy (formerly MicroStrategy) and Metaplanet, now hold over 6% of Bitcoin’s total supply. These large purchases reduce the amount of Bitcoin available on exchanges, creating a “supply squeeze” that can push prices higher. JPMorgan compares this to the post-2008 quantitative easing, where central banks bought bonds to stabilize markets. Similarly, corporate Bitcoin holdings are reducing market swings and boosting stability.
Bitcoin’s inclusion in major equity indices, like the FTSE All-World Index, has also attracted new institutional investors. For example, Metaplanet’s recent upgrade to mid-cap status in FTSE Russell indices has driven passive inflows, where funds automatically buy Bitcoin as part of index tracking. This trend makes Bitcoin more accessible and appealing to large investors, further supporting its price.
Market Dynamics and Price Outlook
Despite its potential, Bitcoin faces challenges. On August 28, 2025, it traded at $113,170, down 9% from its all-time high of $124,533. On-chain data from Glassnode shows Bitcoin is below the average purchase price of investors who bought in the last one to three months ($115.6K and $113.6K, respectively). This creates resistance, as short-term holders may sell to break even, putting downward pressure on the price. Additionally, market signals are mixed: while Bitcoin exchange-traded funds (ETFs) see strong inflows of $81.4 million daily, perpetual futures markets lean bearish, indicating some investor caution.
Looking ahead, JPMorgan predicts Bitcoin will trade between $110,000 and $120,000 through the third quarter of 2025. A breakout to $126,000 could happen in the fourth quarter, driven by factors like Federal Reserve policy changes or continued corporate buying. Key resistance levels to watch are $113.6K and $115.6K, with support at $107K. A drop below $107K could trigger sharper selling, but strong ETF inflows and corporate demand provide a solid price floor.
Altcoins Join the Rally
Bitcoin isn’t the only cryptocurrency gaining attention. Analysts note a “rotation” of capital into altcoins like Ethereum, Cardano, and Avalanche. Ethereum, for instance, is seeing heavy buying, with whale investors purchasing $456 million worth of Ether. Its price has climbed to the $4,500–$4,700 range, with potential to hit $5,500 or $6,000 if Bitcoin rallies. Cardano (ADA) and Avalanche (AVAX) are also performing well, with ADA trading between $0.94 and $1.00 and AVAX gaining 4% weekly. This broader market momentum suggests that institutional adoption is spreading, potentially reshaping the crypto landscape.
Risks and Opportunities
While the outlook is promising, Bitcoin’s path to $126,000 isn’t guaranteed. Short-term resistance and bearish futures markets could slow its rise. However, the combination of lower volatility, corporate buying, and ETF inflows creates a strong foundation. Investors should keep an eye on technical levels, like the $113.6K resistance and $107K support, as well as broader market trends, such as Federal Reserve policies.
Conclusion
Bitcoin’s journey to $126,000, as predicted by JPMorgan, hinges on its declining volatility and growing institutional support. As it becomes a more stable asset, comparable to gold, Bitcoin is attracting serious attention from corporations and investors alike. While challenges remain, the cryptocurrency’s supply squeeze and strong ETF inflows suggest significant upside potential. As the market evolves, altcoins like Ethereum, Cardano, and Avalanche are also gaining traction, signaling a broader shift in the crypto world. For investors, staying informed about technical levels and institutional trends will be key to navigating this dynamic market.
