Investment value surpasses gold! JPMorgan calls out: Bitcoin is expected to reach $266,000 in the long term

JPMorgan Chase analysts point out that although the cryptocurrency market remains under short-term pressure from bearish sentiment and risk asset corrections, from a long-term structural perspective, Bitcoin’s investment appeal has even surpassed gold, and its future price could surge to $266,000. Led by Managing Director Nikolaos Panigirtzoglou, the analysis team released a report on Wednesday stating that the crypto market has recently come under renewed pressure, mainly due to weakness in risk assets like technology stocks. Even traditional safe-haven assets such as gold and silver have experienced significant declines. Additionally, the Solana DeFi platform Step Finance was hacked, resulting in losses of approximately $29 million, further damaging market confidence. According to CoinGecko data, Bitcoin has fallen over 10% in the past 24 hours, with prices hovering around $65,000. JPMorgan analysts say that Bitcoin has now broken below the “production cost”—$87,000. What does this mean? Historical experience shows that production costs are often seen as a “soft bottom” for the price. If prices remain below production costs for an extended period, it will force unprofitable miners to shut down, which in turn lowers the overall industry’s marginal production costs, creating a new equilibrium point. Despite the heavy selling pressure in the short term, JPMorgan remains relatively optimistic about Bitcoin’s long-term prospects, with the key being that the “relative positioning” between Bitcoin and gold is changing. Analysts note that since October last year, gold has significantly outperformed Bitcoin, but at the same time, gold’s volatility has also increased noticeably. In this context, when measured by “risk-adjusted returns,” Bitcoin appears to be more attractive for investment. Currently, the volatility ratio of Bitcoin relative to gold has dropped to about 1.5 times, hitting a historic low, indicating that Bitcoin’s potential return structure is improving under the same risk level. From an asset allocation perspective, JPMorgan further estimates that if Bitcoin’s market cap can catch up with the total amount of privately held gold (about $8 trillion, excluding central bank reserves), the fair price of Bitcoin should be $266,000. The analysts emphasize that this is a “long-term theoretical target price” and unlikely to be realized this year. However, it shows that once market panic subsides, Bitcoin will once again be viewed as an “extreme risk-averse asset” on par with gold, with considerable long-term upside potential. It is worth noting that this target price has been significantly raised from JPMorgan’s estimate of $170,000 in November last year. At the same time, they also raised their long-term gold target price to $8,000–$8,500 per ounce. Despite the ongoing turmoil in the crypto market, JPMorgan points out that the liquidation scale in the crypto derivatives market remains significantly lower than the intense deleveraging wave last quarter. The degree of deleveraging in perpetual contracts, measured by Bitcoin and Ethereum market share, is much lower than during the liquidation wave in October last year; and the forced liquidation scale of non-native crypto institutions in CME Bitcoin and Ethereum futures is also more moderate than last quarter. However, fund flows into spot ETFs still reflect a generally bearish market sentiment. Especially, the outflow of funds from Ethereum ETFs is three times that of Bitcoin ETFs, indicating that during liquidity tightening, competing cryptocurrencies face heavier selling pressure. Additionally, the supply of stablecoins has decreased in recent weeks, further reinforcing market caution. Nevertheless, JPMorgan believes this should not be interpreted as investors completely withdrawing from the crypto market.